Premier Foods Share Discussion Threads

[y1phr1] 07/11/2018 14:39

Not long to wait then whoosh.

[nobbyx] 18/10/2018 11:45

Good news from PFD? That'll be a first. Best of luck on that one.

[lammylover] 18/10/2018 07:25

HY results will be out on 13/11/18. I hope Darby has some good news up his sleeve....

[lammylover] 20/8/2018 14:46

Down 5% today so far; our lovely friendly algo traders doing their bit to drive the price down...

[american idiot] 03/8/2018 15:03

RSI is sub 10.

Possibly the lowest Ive ever seen.

Time for the share price to balance itself out soon.

[american idiot] 24/7/2018 12:16

Still back to 36p - 40p range.

Oasis have stopped buying. Darby is still CEO.

The excitement is now over along with the rise in the share price

[american idiot] 19/7/2018 09:17

Back into 36p - 40p range ?

[from8to800] 18/7/2018 13:59

This is showing some strength... Plus chart pattern looks killer. Buy stop in place.

[lammylover] 10/7/2018 07:47

Some fund must have sold big for Oasis to double share. Obviously don't believe in Oasis threat to topple Darby and sell Batchelors. Different perspectives, I guess we find out soon who is right...

[jhan66] 10/7/2018 07:22

Big increase by Oasis. I wonder if someone’s talking to McCormack in the background. They’d have renewed interest after board changes

[lammylover] 10/7/2018 06:07

Oasis / Paulson forcing issue of ownership of PFD. Hopefully Nissin will buy out Batchelors for £300m or better still the whole company. Company Mkt cap worth less than sum of parts, as these fund holders know. Expect share price to continue to rise to AGM.

[shaker44] 09/7/2018 18:16

lets hope we get rid of self serving idiot ceo Darby and start to unlock value here.
No doubt japs are unhappy with oasis/paulson confrontational style, but long overdue.
steady as she goes works for ceo comp but not shareholders. interesting that Paulson sees enough value to treble up

[vinceelliott] 09/7/2018 17:15

Surprised it has been so quiet here, as:
share price up 12% since start of month;
clashes on re-election of ceo;
RNS and 6% plus holding by Paulson & co, a backer of undervalued companies who are takeover candidates;

I am long and have held for over a year on recovery grounds rather than takeover.

See also #19867 and RNS re Oasis challenging ceo

[diku] 22/5/2018 10:42

Will the high energy costs impact here?..

[american idiot] 16/5/2018 10:40

Fitch Assigns Premier Foods Prospective GBP300m Notes 'B(EXP)'/'RR4'
16 May 2018 - 10:06

(The following statement was released by the rating agency)

Fitch Ratings-Milan/London-May 16: Fitch Ratings has assigned an expected rating of 'B(EXP)'/'RR4' to the GBP300 million notes that Premier Foods plc's (Premier) finance vehicle Premier Foods Finance plc launched yesterday. The notes will fund a tender offer for the GBP325 million issue due in March 2021 and will aim to lengthen average maturities and reduce the company's debt via a GBP25 million reduction of total long-term debt.

The notes will be guaranteed by Premier Foods plc and most of the group's operating companies. They will rank pari passu with the existing GBP210 million floating rate notes due in 2022, and with the GBP176 million revolving credit facility extended to 2022 borrowed by Premier Foods Investments Limited and will share the same security package, which consists of fixed charges over certain real estate and intellectual property rights, floating charges over all the assets of each guarantor, and a share pledge over capital stock of the issuer and each guarantor.

Premier Foods' Issuer Default Rating (IDR) of 'B' remains on Negative Outlook, reflecting Fitch's view that the company remains exposed to trading challenges in the UK packaged food market that might put at risk its ability to reduce its high leverage. Premier reported yesterday its annual results for the year ending March 2018 (FY18), showing a partial recovery from the sharp profit contraction in FY17 and a reduction of leverage. However, free cash flow (FCF), at around GBP25 million based on preliminary numbers, remains below historical levels and further shocks could prejudice a full reduction of leverage to parameters consistent with the current rating.

Key Rating Drivers
FY18 Trading Recovery: Premier, like other fast-moving consumer-goods companies in the UK, managed to pass on some of its higher costs to consumers in FY18, achieving a 3.6% revenue increase in organic terms. The company also continued its cost rationalisation efforts to protect its profit margin, completing its SG&A cost savings programme in FY18. Overall, this has enabled Premier to bring back its EBITDA, based on preliminary figures, to GBP140 million in FY18, closer to the FY16 level of GBP145 million after the 9% contraction to GBP131 million in FY17.

High Leverage: We calculate that Premier's FFO-adjusted net leverage reduced in FY18 to around 6.5x from a very high 8.0x at FYE17 but remains weak for its 'B' rating. We project that Premier should be able to deleverage to around 6.0x in FY19, subject to the recovery of EBITDA reported for FY18 remaining sustainable. This would bring the balance sheet into a less vulnerable position and could support a revision of the Negative Outlook to Stable. The company's business profile is supported by well-known brands, long-term relationships with its customers and good opportunities for international growth, which should support its revenue and partly offset the leverage weakness.

Volatile Profit Performance: The company is exposed to a challenging operating environment, which has led to ups and downs in its profits between FY15 and FY17 despite the broad stability of demand for packaged foods in the UK. EBITDA contracted by 9% in FY17 due to higher input costs and high investments in advertising and promotions. Premier's raw-material cost base grew due to the weakening of sterling, but the company managed to only marginally pass these increases on during the year. This disappointing performance in FY17 followed a FY16 that had marked a recovery from several quarters of contracting revenues during 2015.

Consolidating UK Retail Market: Fitch estimates an important proportion of Premier's revenue (close to 60%) is generated from the four largest retailers in the UK: Tesco PLC (BB+/Stable), Asda, J Sainsbury's, and Morrisons, which have strong bargaining power and can put pressure on the profitability of their suppliers. These major retailers have pursued a strategy of protecting the spending power of UK consumers by pressuring their suppliers to absorb higher input costs following the sharp depreciation of sterling in 2016. This affected Premier's FY17 margin. The recently announced merger between Asda and J Sainsbury's is likely to further exacerbate this situation.

Changing Consumer Patterns: An ongoing shift in consumer shopping behaviour towards healthier and more authentic products, and from traditional big retailers to hard discounters and online, is challenging Premier's performance. Premier needs to continue rejuvenating its product portfolio with new packaging and formulations to offer new ways of consuming its long-established products. We believe this process weighs on its cost structure as it needs to sustain advertising and promotion charges to keep its brand and product proposition relevant. In particular, while these charges were kept under control in FY18, we assume an increase in FY19.

Positive Free Cash Flow: Premier's track record of maintaining positive annual FCF generation mitigates these concerns. Over FY19-FY21 pension contributions will absorb large part of cash generation (GBP40 million-45 million a year) but we project they should still leave GBP15 million- 25 million for debt paydown. The fact that capex is being kept under tight control (at most 3% of revenues) and Premier's lending documentation prevents it from distributing dividends so long as net debt/EBITDA remains above 3.0x, support FCF generation.

Leading UK Ambient Food Producer: Premier has a strong position as one of the UK's largest ambient food producers, with an almost 5% share in the fragmented and competitive GBP28.7 billion UK market. It benefits in manufacturing, logistics and procurement in the UK from its wide range of branded and non-branded food products, but mainly competes in mature segments such as desserts and cakes. This product portfolio, which the company has limited financial resources to complement with the entry into higher-growth categories, limits its growth prospects. Premier therefore relies on continuing its marketing and innovation efforts to protect its market share.

Derivation Summary
Premier is one of the largest UK food producers, selling and distributing a wide range of branded products. The rating is one notch lower than international margarine leader Sigma HoldCo BV (B+(EXP)/Stable), which is broadly diversified by geography but focused on one product category. Both companies currently have high leverage and suffer from product portfolio maturity but Premier is ahead in its rejuvenation. Compared with Sigma, Premier enjoys a good, but not as strong, EBITDA margin and generates significantly less internal cash flow. Premier's operating profit margin is higher than that of other fast-moving commercial goods peers in the 'B' category, such as Yasar Holding A.S. (B/Stable), JSC Holding Company United Confectioners (B/Stable) and PJSC BELUGA GROUP (B+/Stable). However, Premier's cash flow generation is more volatile and its leverage is higher.

Key Assumptions
Fitch's key assumptions within our rating case for the issuer include:

- annual top-line growth of 1.6%-1.8% over FY19-FY21;

- fairly stable EBITDA margin, whereby cost savings are re-invested into advertising and promotion;

- FFO incorporating pension contributions of GBP40 million a year following agreements with its pension trustees (reduced compared to previous forecasts);

- low capex, stable at GBP20 million-25 million (2.5%-3.0% of sales).

Rating Sensitivities
Future Developments That May, Individually or Collectively, Lead to Move the Outlook to Stable

- Trading performance recovering (consistently positive organic revenue growth) and the ability to maintain EBIT margin above 10% after having sufficiently invested in advertising and promotions to protect its market position and drive growth

- Visibility that FFO adjusted net leverage is trending towards 6.0x (pension deficit contributions are deducted from FFO)

Future Developments That May, Individually or Collectively, Lead to Negative Rating Action

- Evidence of weaker pricing power in the UK market

- Failure to stabilise performance with continued revenue declines and margin deterioration, with EBIT falling below 10%

- Neutral to negative FCF on a sustained basis due to profitability erosion, higher or unexpected capex and increases in pension contribution or funding costs

- Expectation that FFO adjusted net leverage will remain well above 6.0x in FY19 (pension deficit contributions are deducted from FFO)

- FFO fixed charge coverage below 1.8x on a sustained basis

Liquidity
Adequate Liquidity: Premier Foods' liquidity is supported by its GBP176 million revolving credit facility extended to December 2022 and positive FCF of around GBP25 million in FY18. Fitch expects liquidity to remain adequate over FY19-FY22, thanks to the positive FCF generation over the forecast horizon. The group will face only minor scheduled debt repayments before 2022, when the GBP210 million secured fixed notes become due, assuming the GBP325 million bond is refinanced. We therefore assess refinancing risk as manageable.

Key Recovery Rating Assumptions
The 'B(EXP)'/'RR4' senior secured rating reflects average recoveries (31%-50%) for senior secured noteholders in the event of default. Upon completion of the refinancing with successful placement of the new GBP300 million notes, we would be likely to revise expected recoveries to 37% (from 34%) due to the slightly smaller debt amount carried by Premier Foods and the mild EBITDA improvement in FY18.

Fitch assumes that the enterprise value of the company and the resulting recovery of its creditors (including the pension trustees) would be maximised in a restructuring scenario under our going-concern approach rather than in a liquidation scenario due to the asset-light nature of the business and the strength of its brands. Furthermore, a default would probably be triggered by unsustainable financial leverage, possibly as a result of weak consumer spending affecting sales and profits and combined with ongoing punitive pension deficit contributions.

Fitch has applied a 25% discount to EBITDA and a distressed enterprise value/EBITDA multiple of 5.0x, reflecting challenging market conditions in the UK and the reliance on a single country. These are partially offset by a portfolio of well-known product brands. The notes rank equally with the pension schemes for up to GBP450 million, based on the company's agreement with pension trustees. We have therefore included a GBP450 million pension trust claim as a senior obligation in the debt waterfall within our recovery calculation.

[american idiot] 16/5/2018 07:57

Following on from the Moodys note from last year.

Moody's: Premier Foods recent results and bond offering are credit positive; no change to outlook at this stage
15 May 2018
Milan, May 15, 2018 -- Moody's Investors Service says that Premier Foods plc's (B2 negative) results for the financial year ended March 2018 (FY 2018) and its intention to refinance its existing GBP325 million senior secured notes with a new GBP300 million bond are credit positive. However, we believe that a longer track record of stabilising its performance is warranted before we could consider stabilizing the outlook on its ratings. The negative outlook on Premier Foods' ratings still reflects a degree of uncertainty on the company's capability to fully withstand the currently difficult market conditions for UK food producers.

...........

In all, Moodys reflects the progress being made by Premier Foods however more time is needed before credit metrics can be improved :-)

[chrisgail] 15/5/2018 07:30

Another positive step forwad. Reasonably good cash generation, pets hope for a rerating.

[nobbyx] 30/4/2018 16:59

What do you expect of a zombie?

[saltaire111] 30/4/2018 16:10

The most boring share on the market. Yawn!

[estienne] 17/1/2018 10:41

From Investors Chronicle:

Premier Foods (PFD) reported a 4 per cent increase in sales during the third quarter, brings year-to-date sales to a 2.6 per cent increase. This was mainly thanks to non-branded and international sales, while revenue from branded items was largely flat. The Batchelors brand saw its fourth consecutive quarter of growth. Yesterday the company addressed rumours that it is looking to sell the soup brand to Nissin, with which it already has a strategic partnership. The cost cutting programme is hoping to cut its debt burden by the end of the financial year. We’re waiting to see more details before getting bullish on Premier. Sell.

[american idiot] 16/1/2018 07:18

Excellent trade update. Premier Foods is moving in the right direction.

Q3 International sales3 growth up +26% !!!

Premier Foods plc (the "Company" or the "Group")

Quarter 3 Trading Statement for 13 weeks ended 30 December 2017

· Q3 Group sales up +4.0%; year to date Group sales up +2.6%

· Q3 International sales3 growth up +26%

· Market share gains in 6 of 8 major brands year to date

· Nissin & Mondelez International strategic partnerships contributing strongly to sales growth

· Record 220 million mince pies sold in 2017

· Expectations for progress in the full year remain unchanged

[csmwssk12hu] 15/1/2018 08:08

So looks like it's true they are selling at last

[american idiot] 15/1/2018 07:07

15 January 2018

Premier Foods plc (the "Group")



Premier Foods plc notes weekend press speculation concerning a possible sale of its Batchelors' brand to Nissin Foods Holdings Co. Ltd ("Nissin").

The Board has made no changes to its strategy since the strategic update communicated in our preliminary results announcement on 16 May 2017. The Board remains focussed on our strategic objectives, including that of reducing the ratio of net debt to EBITDA below three times.

On 29 June 2017 the company confirmed that, in line with good corporate governance, it regularly reviews options to deliver value for all its stakeholders. Such reviews do periodically involve discussions with third parties, including Nissin (with whom the company signed a Co-operation Agreement on 23 March 2016). There is no current situation where discussions have gone beyond an exploratory stage.

As a matter of normal good governance, the Board continues to keep under review any options which could potentially add value for shareholders and other stakeholders, and accelerate the delivery of the Board's strategic objectives, particularly with respect to reducing gearing.

Think that last paragraph speaks volumes.

Creating shareholder value through the disposal of assets is good !

[mick] 14/1/2018 20:15

It could be interesting for PFD shareholders in the morning!