Thanks to the summer sunshine, sales across the board have increased in the UK, with everything from sun loungers to barbecue foods flying off the shelves. This has gone a long way in building on the good news in the retail industry which was triggered by the economic upturn earlier this year.
This has had a positive impact on the half year results released this week by Premier Foods. The group, which owns iconic British brands such as Mr Kipling and Hovis, posted figures revealing that losses narrowed to £23.5 million in the six months to Sunday 30th June.
This compares extremely favourably to the same period last year, in which losses of £45.8 million were posted.
Premier Foods has struggled in recent years due in part to the consumer cutback caused by weaknesses in the economy. As a result, it has been forced to sell off many of its poorly performing brands, a number of which were picked up by Asian firms.
Furthermore, restructuring work is still ongoing in order to reduce losses still further and hopefully return the group to profitability in the next few years. Reorganisation work cost a total of £12.4 million in the first half, which included the closure of two distribution centres and three bakeries.
Chief executive Gavin Darby spoke optimistically of the future in a statement released by the company.
He said; “We have already completed the actions to deliver the promised £20 million of overhead cost savings for 2013 and continue to keep a tight control over costs.
“The restructuring of our bread and milling business is ahead of plan and we are taking the decisions necessary to create a more sustainable platform for this business.”
Apparently the restructuring work is truly beginning to take effect, with sales in the bread division rising by 8.2 per cent to £356 million. However, the group must now address issues within its wider business as total grocery sales fell by 1 per cent.
Although there is still some way to go, Premier Foods is certainly on the right track and making progress year on year. Hopefully, continued advancements in the economic recovery process and a rise in disposable income will see consumers once more exercising their spending power to bring Premier Foods’ brands back to profitability.
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