Premier Foods has said it will raise prices of its products as part of plans to tackle rising costs of wheat, dairy and fuel, after reporting an annual profit that surpassed its forecast.
The group, which also hiked dividends by 20% after its Mr Kipling brand enjoyed its best year ever, said it was gaining market share as consumers seek good value-meal solutions amid Britain's cost-of-living crisis.
"Yet again, our brands have grown faster than their categories, with revenues increasing nearly 10% vs two years ago as they gained volume and value market share in Grocery and Sweet Treats both in-store and online," commented Alex Whitehouse, chief executive.
Cost-Of-Living Crisis
The grocery sector's outlook has been weighed by the costs-of-living crisis in Britain and supply disruptions from the war in Ukraine, with big supermarket groups including Tesco and Sainsbury's warning of lower profits this year.
Although Premier Foods does not have any direct exposure to Russia or Ukraine, it said it would be affected by rising prices of commodities such as wheat and dairy, as well as surging energy prices and the slowing UK economy.
"We anticipate seeing further input cost inflation. which we will continue to address using a combination of measures, as we have successfully done before, and including cost efficiency programmes and increased pricing," said Whitehouse.
"Our initial trading so far this year has been encouraging, in line with our plans, and we are seeing strong market share gains as consumers increasingly look for good value meal solutions. With this positive momentum, and the resilience of our brands, categories and supply chain, we are confident of delivering another year of good progress."
British inflation leapt last month to its highest annual rate since 1982, piling pressure on the UK government to step up help for households facing a worsening living standard.
Full-Year Sales
The company, which also owns brands like Bisto and Ambrosia, and distributes Nissin's Cup Noodle and Cadbury cakes, reported headline trading profit of £148.3 million (€175.3 million) for the year ended April 2, above its forecast of at least £145 million.
Separately, a report from consultants McKinsey said on Monday that British consumers are reacting to the crisis by switching from branded to lower-priced and private-label products and from supermarkets to discounters.
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