Premier Foods cooks up cost-cutting deal for Bird’s Custard, Angel Delight and Marvel
Wednesday 18 June 2014
Premier Foods’ so-called power brands failed to grow as hoped, as the food group today spun off the making of its Bird’s Custard, Angel Delight and Marvel brands to help ease costs.
The manufacture of Bird’s Custard, Angel Delight and Marvel dried milk powder have been put into a joint venture with food group Specialty Powders Holdings.
The jv, called Knighton Foods, will see Specialty give its Phoenix Foods and Agglomeration Technology businesses and expertise in return for a 51% controlling stake and a loan to repay its existing debt.
Premier Foods will contribute its Knighton site for a 49% stake. Premier will invest £16 million of its private label sales to the jv but will keep the majority of the sales from its brands from Knighton and will retain all its other brands that are made at the site.
The products will be processed and packed by Specialty at Premier’s Knighton factory in Staffordshire while two production lines will transfer from Knighton to Premier’s Ashford facility in Kent.
The deal also includes the licensing of the Brown & Polson brand of home-baking ingredients to the JV and follows Premier splitting off its bread business this year.
The JV will help Premier to focus on its “power brands” and ease costs for the group which earlier this year completed a £1.13 billion refinancing deal — sorting out more than six years of escalating debt and a complex lending structure.
Gavin Darby, chief executive at Premier, said: “This innovative agreement will help to improve the efficiency of Premier’s grocery infrastructure while allowing us to benefit from a dedicated team with expertise.”
The Mr Kipling cakes and Bisto gravy group today said sales for the second quarter for its “power brands” are anticipated to be negative and below expectations because of “subdued grocery markets” but it said its profit for this year should remain as expected.
Shares fell 6% to 54p amid concerns about the performance of these “power brands” that comprise Ambrosia, Mr Kipling, Oxo, Bisto,Lloyd Grossman, Batchelors and Sharwoods.
- 1 Tourist films plane's descent just metres above packed Caribbean beach
- 2 Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
- 3 World Book Day: Boy 'excluded' from school after dressing up as Fifty Shades' Christian Grey
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 GamerGate: developer Tim Schafer provokes rage with joke about online gaming activists at industry awards
Tourist films plane's descent just metres above packed Caribbean beach
Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
Isis 'bulldozes' Nimrud: UNESCO condemns destruction of ancient Assyrian site as a 'war crime'
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Westboro Baptist Church couldn't picket Leonard Nimoy's funeral because they didn't know where it was
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Durham Free School: 'Creationism taught at' free school facing closure
End of the licence fee: BBC to back radical overhaul of how it is funded
Elif Shafak: Turkish author warns against rise of British nationalism
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
iJobs Money & Business
£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...
£8 per hour: Recruitment Genius: This Pension Specialist was established early...