Mr Kipling cakes to take on America, Premier Foods reveals
Premier Foods has revealed it is to launch Mr Kipling in America in a bid to make the classic British cake a US household name.
The mini packaged delicacies, first introduced in 1967 as a way to sell fresh-tasting cakes in supermarkets, will be marketed and distributed across America through the bakery arm of US giant Weston Foods.
The cakes are expected to begin being shipped out this spring.
The FTSE 250 firm said the move is part of an “international strategy to deliver sustainable profitable growth with a major emphasis on in-market execution”.
The company added that its latest market test on Mr Kipling in Canada also “performed well, with encouraging rate of sale metrics”. Further rollout in Canada could be on the cards.
The news came as Premier issued full year profit guidance for the year to March 2021 of £145-£150 million, up around 12% from £132.6 million a year earlier as the company - which is also behind brands including Oxo and Ambrosia - saw “another exceptional quarter of growth” as Britons stayed home and cooked through the third quarter.
Sales for the 13 weeks to December 26 were up 9%. Mr Kipling cakes are on track for a record year with UK sales up 7% in the period, and the Sharwoods brand is soaring, seeing sales up 40% on the same quarter a year earlier.
Premier's Bisto and Oxo brands saw a bump in sales over Christmas as families separated by the pandemic cooked multiple festive dinners, the firm said.
The company also announced a new net debt to earnings ratio target - pre tax, depreciation and amortisation - of below two times by the year end.
Chief executive, Alex Whitehouse, said that he expects to see continued sales growth in the final quarter as “out of home eating is likely to remain heavily restricted”. He said: “Together with excellent execution both instore and online, we continue to take market share in volume and value terms.”
The firm, which has faced pressure from activist investors including shareholders Oasis and Paulson & Co - the latter just cut its shareholding in the group - has paid down debts in recent months including by using £37.3 million garnered from the sale of its 49% stake in bread maker Hovis to a UK private equity firm late last year.
Analyst Martin Deboo at Jefferies noted that Premier Foods is “clearly enjoying a good war”.
He said: “However, this is more than just a bubble economy, with the Group gaining both volume and value share during the quarter.”
Shares were down 3.7% in early trading.
