Premier Foods is in talks to sell its Ambrosia brand as the firm announced its CEO, Gavin Darby, is to leave the company in January.
The British food manufacturer said the sale Ambrosia would allow it to focus on brands such as Batchelors and paying down its debt.
The Ambrosia brand – which consists of products such as custard and rice pudding – saw lower revenues in the first half of the year. Premier said this was due to a decision to reduce the levels of promotional investment which in turn reduced volumes.
Darby, who has been chief executive of Premier Foods for six years, said he would step down from his role on 31 January.
The news comes as Premier published its half-year figures in which its loss before taxation increased to £2.2 million – up from £1.2 million on the same period last year.
Meanwhile, revenue was up 1.3% to £358 million as the company benefitted from the strong performance of its Batchelors brand, which saw growth of 6.8%.
Premier said the majority its categories saw value declines in both July and August, in part because of warm weather in the UK.
Gavin Darby said: “We are pleased to report revenue growth of +1.3% in the first half, a +6.2% increase in trading profit and net debt £26m lower compared to last year. Mr Kipling, the group’s largest brand was key to this growth following an excellent consumer response to its brand relaunch in the UK with revenues up +13%. Batchelors, the group’s third largest brand, delivered revenue growth of +6.8% as consumers continue to enjoy its new convenient pots range.”
“We saw improved resilience displayed by the business during the hot summer experienced in the first half of the financial year. However, we are presently experiencing some operational challenges with the implementation of the final sweet treats phase of our logistics transformation programme.”
He added: “The board has determined that it should focus resources on areas of the business which have the best potential for growth through accelerated investment in consumer marketing and high return capital projects. Accordingly, we are pursuing options to fund these plans as well as delivering a meaningful reduction in net debt, through discussions with third parties regarding the potential disposal of our Ambrosia brand. Although there is no certainty that any transaction will complete, we will update shareholders in due course.”
© FoodBev Media Ltd 2020
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