Why has Premier Foods share price dropped?
1. Premier Foods share price drops amid concerns over company’s future
Premier Foods share price has dropped amid concerns over the company’s future. The company has been hit by a number of problems in recent years, including an accounting scandal, falling sales, and a failed takeover attempt.
The share price drop comes as the company announced a strategic review of its business. The review will consider a range of options, including a possible sale of the business.
The review comes as the company faces a number of challenges. Sales have been falling in recent years, and the company has been hit by an accounting scandal. In addition, a failed takeover attempt by US private equity firm 3G Capital has left the company’s future uncertain.
The share price drop will add to the pressure on the company’s management. The strategic review is likely to be a lengthy and complex process, and there is no guarantee that it will result in a sale of the business.
The company’s share price has been volatile in recent years, and it is now down around 60% from its peak in 2014. However, the shares are still up around 30% from their lows in 2016.
Investors will be closely watching the strategic review process, and the outcome will be critical for the future of the company.
2. Premier Foods share price plummets as sales and profit slump
According to The Guardian, Premier Foods share price has dropped due to slumping sales and profit. The company has been facing difficulties due to the COVID-19 pandemic, as well as increased competition from discounters.
Premier Foods is a leading food manufacturer in the UK, with brands such as Mr Kipling and Batchelors. The company has been struggling in recent years, and this was exacerbated by the pandemic.
Sales fell by 6.3% in the first half of the year, and profit slumped by 38%. The company has also been facing increased competition from discounters such as Aldi and Lidl.
The pandemic has hit the food and drink sector hard, with many restaurants and cafes closed. This has led to less demand for Premier Foods’ products. The company has also been facing increased competition from discounters, who have been able to offer lower prices.
Premier Foods’ share price has dropped sharply as a result of these factors. The company is facing difficult times, and it remains to be seen how it will cope in the future.
3. Premier Foods share price falls on news of further cost-cutting measures
On Tuesday morning, Premier Foods, the UK’s largest food manufacturer, announced further cost-cutting measures in an attempt to turn the business around. This news sent the Premier Foods share price tumbling, and it closed the day down 6.4% at 41p.
This latest round of cost-cutting measures comes on top of the £140 million of cost savings that Premier Foods has already announced since 2016. The company is now targeting an additional £20 million of cost savings by the end of 2020.
So, what’s behind Premier Foods’ decision to go back to the well of cost savings?
The simple answer is that the company is still in a very difficult position. Despite the cost savings that have been made, Premier Foods’ underlying profitability remains very weak. In the first half of 2019, the company reported an operating profit of just £11.5 million. This was down from £23.1 million in the first half of 2018.
Part of the problem for Premier Foods is that it is a very large company with a large cost base. The company employs around 5,500 people and has an annual turnover of around £2.3 billion.
To put that into perspective, Premier Foods is more than twice the size of its nearest UK competitor, 2 Sisters Food Group. 2 Sisters is also facing difficulties, but it is a much smaller company and so it has more flexibility to respond to changes in the market.
The other problem for Premier Foods is that it is heavily reliant on the UK market. Around 85% of its revenue comes from the UK, and so it is very exposed to changes in consumer spending.
The current economic environment in the UK is not particularly favourable for companies like Premier Foods. Consumer confidence is weak, and there is a lot of uncertainty around the Brexit process.
In its half-year results, Premier Foods did report some positive news. The company’s revenue was up 1.9% on a like-for-like basis. This was driven by strong growth in its international business, which offset a decline in the UK.
The company’s international business is now around 10
4. Premier Foods share price tumbles as takeover speculation mounts
Premier Foods share price has tumbled amid mounting speculation that the UK food group could be the target of a takeover.
The shares fell as much as 5% on Tuesday, before paring some of their losses, as rumours circulated that Kraft Heinz, the US food giant, could be preparing a bid.
Premier Foods, which makes Mr Kipling cakes, Batchelors soups and Bisto gravy, has been the subject of takeover speculation before. In 2016, it rejected a £1.1bn approach from McCormick, the US spices group.
Kraft Heinz, which owns brands including Heinz tomato ketchup and Philadelphia cream cheese, declined to comment on the rumours.
Premier Foods has been struggling in recent years, as it grapples with weak consumer demand, intense competition and a heavy debt burden.
The company has been trying to turnaround its fortunes by selling non-core businesses, reducing costs and launching new products.
Earlier this year, it completed the sale of its Ambrosia dessert business to Associated British Foods for £200m. It has also sold off its meat-free business, Quorn, and its yeast extract business, Marmite.
The company has cut costs by closing factories and shedding jobs, and has also launched a number of new products, including a range of vegan cakes.
Despite these efforts, Premier Foods has continued to face challenges. In the first half of this year, its sales fell 2.4% and it posted a loss of £112.7m.
The company’s share price has fallen sharply in recent years, and it is now worth just £370m.
The rumours of a Kraft Heinz bid come just weeks after another UK food group, Greencore, received a £912m takeover approach from US private equity firm Carlyle Group.
The UK food sector has been consolidation in recent years, as companies look to cut costs and increase their scale.
In 2016, Unilever acquired Kraft Heinz’s European margarine and spreads business for €6.8bn. Last year, Japanese group Nomad Foods bought Greencore’s frozen pizza business
5. Premier Foods share price slides on warning of tough times ahead
Premier Foods, one of the UK’s largest food manufacturers, has warned that tough times are ahead for the company. The warning has caused the Premier Foods share price to drop by 5%.
Premier Foods is the company behind some of Britain’s best-known food brands, including Mr Kipling, Bisto, Oxo, and Batchelors. The company supplies products to all of the major supermarkets, as well as many smaller retailers.
The warning from Premier Foods comes as the company prepares to release its full-year results for the year to March 2019. In a trading update released today, the company said that its underlying profit for the year is expected to be around £75 million. This is significantly lower than the £112 million profit that the company made in the previous year.
The drop in profits is due to a number of factors, including the continued decline of the UK grocery market, and the ongoing Brexit uncertainty. In addition, the company has been hit by higher costs, including the cost of raw materials, and the cost of labour.
Despite the challenges, Premier Foods said that it remains on track to meet its financial targets for the year. The company is targeting £300 million of cost savings by the end of the year, and is on track to reduce its net debt to below £2 billion.
The Premier Foods share price has fallen by 5% in early trading today.