Q3 Trading Update

Note: Headline results presented for the quarter exclude Knighton Foods

Alex Whitehouse, Chief Executive Officer

"We delivered a very strong performance in our important third quarter with double-digit sales growth across the Group, underlined by particularly strong market share gains of over 120 basis points. Our International business had another very good quarter, growing sales by 11%, delivering progress in our strategic markets. Sales in new categories more than doubled, with Ambrosia Porridge pots and Mr Kipling and Angel Delight Ice-cream both standout performers. Meanwhile, The Spice Tailor continued to grow strongly, achieving distribution gains in target markets, while FUEL10K integration into the Group is progressing in line with plan."

"Festive favourites such as Bisto, Oxo and Paxo contributed to our biggest ever Christmas, as consumers enjoyed not only the core ranges but new products such as Bisto Best meat free gravy and Paxo Chicken and Bacon stuffing. We sold nearly 190 million mince pies, 4 million more than last year, helped by the new Mr Kipling 'Best Ever' Signature mince pies."

"The lower promotional price points we introduced in the third quarter have positively impacted performance while also helping consumer budgets go further. These lower prices will be extended to additional products such as Loyd Grossman cooking sauces and Mr Kipling Bakewell slices in quarter four."

"With another strong period of trading behind us, and great plans for the coming months, we are well on track to deliver on profit expectations for this year."

Trading update

Grocery

Grocery sales increased by 11.9% in the quarter, with strong performances across the portfolio as the Group again substantially outperformed its categories, delivering over 110 basis points of share growth. Brands in the Flavourings & Seasonings category enjoyed a strong festive season; Bisto, Oxo and Paxo delivered significant growth in both core and new product ranges such as Bisto Best meat free gravy, Oxo Stock Pots, and Paxo Chicken & Bacon stuffing. Sales from new categories more than doubled in the quarter; Ambrosia Porridge pots benefitted from the launch of the new Apple & Blueberry flavour, while Mr Kipling and Angel Delight ice-cream hit top quartile run rates following listings in two major retail customers. Non-branded sales were 14.5% higher reflecting price increases in retailer branded product categories compared to the same quarter last year.

Sweet Treats

Branded Sweet Treats returned to growth with sales up 17.1%, largely due to significantly higher sales of Cadbury cake compared to last year. This strong performance reflected growth in core Cadbury Mini Rolls and cake bars and a softer comparative due to unscheduled maintenance of a plant line last year. The Group grew well ahead of the cake category in the quarter, gaining over 120 basis points of share and sold 4 million more Mince Pies than last year, including the new Mr Kipling 'Best Ever' Signature mince pies. Growth of 28.7% in Non-branded sales was due to contract gains in pies and tarts and pricing benefits.

International

International continues to progress strongly, sales grew another 11%3 in the period. In Ireland, growth was broad based, with all Grocery brands significantly up on the prior year. The Spice Tailor and Sharwood's were major drivers of sales growth in Australia, reflecting strong instore execution. In the USA, Sharwood's cooking sauces grew strongly, benefitting from increased distribution gains, while Mr Kipling cake is now listed in nearly 2,000 stores.

Mr Kipling has also achieved new listings in Canada, which will take the combined number of listings across North America close to 3,000 stores. Following recent distribution gains in New Zealand, Belgium and Switzerland, The Spice Tailor will also soon be available in the USA and France, increasing the brand's presence to 10 countries.

Outlook

The Group continues to trade strongly, delivering further progress against its strategy, evidenced by another quarter of double-digit sales growth and market share gains. Now into the final quarter of its financial year, the Company is well on track to deliver against its previously raised profit expectations. Looking further ahead, a full resolution of its pensions schemes is expected within three years, which will open up a range of value enhancing opportunities to further accelerate shareholder value.

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As one of the UK's largest food businesses, we're passionate about food and believe each and every day we have the opportunity to enrich life for everyone. Premier Foods employs over 4,000 people operating from 15 sites across the country, supplying a range of retail, wholesale, foodservice and other customers with our iconic brands which feature in millions of homes every day.

Grocery