Premier Foods back in profit after rise in sales

Premier Foods, the company behind such brands as Hovis, Branston and Mr Kipling, has bounced back into the black.

Until lately stricken by debts as a result of questionable takeover deals, Premier today gave evidence it is getting its strategy right.

Sales in 2009 rose 2.2 per cent to £2.67 billion and it recorded a small profit of £47 million. That compares to a £405 million loss in 2008.

Hovis has more than a quarter of the branded bread market, while Bisto and Oxo also proved resilient in the recession.

The debt pile has been cut to £1.36 billion after a rights issue last year that raised £379 million.

That still looks hefty next to a stockmarket value of under £800 million. Analysts say further cutbacks are needed.

Chief executive Robert Schofield said: "Premier Foods achieved a tremendous amount in 2009.

"We strengthened our balance sheet, cut debt, raised trading profits and returned to positive earnings."

Panmure Gordon moved the shares from hold to buy. "While we believe Premier has still to prove it can deliver against the market's limited expectations, we think it is the right time to become more positive," said the broker.