(qlmbusinessnews.com via theguardian.com – – Tue, 13th 2018) London, Uk – –
Premier Foods also says chief executive Gavin Darby is to leave in January
Ambrosia began making custard and rice puddings in Devon in 1971.
Premier Foods is in talks to sell its Ambrosia brand as the group announced that its chief executive, Gavin Darby, is to leave the company in January, months after a spat with activist investors.
The foods group said it was “in discussions with a number of interested parties” about the sale of Ambrosia, its custard and rice pudding brand originally created in 1971 in Devon and still manufactured there today.
Premier said a sale would allow the firm to focus on its growing brands, such as Batchelors, and to accelerate the rate at which it pays down debt.
Darby, who has been chief executive for six years, said he would step down on 31 January as the company took on a new strategy.
“The board has determined that it should focus resources on areas of the business which have the best potential for growth through accelerated investment in consumer marketing and high return capital projects,” he said.
In July Darby faced a shareholder revolt after 41% failed to back his re-election. At a stormy annual meeting, the activist shareholder Oasis Management called on Darby to step down regardless of the outcome of the vote, accusing him of driving Premier into a “zombie-like state” because of his failure to drive growth.
Darby, however, secured the backing of a majority of shareholders and the board.
The company announced his departure alongside the firm’s first-half results. Pretax losses in the six months to 29 September widened to £2.2m from £1.2m in the same period a year earlier.
Revenue rose 1.3% £358m, boosted by the relaunch of its Mr Kipling cakes brand and by growing demand for its Batchelors convenience pots range.
Premier Foods said Mr Kipling had a “storming” first half, with revenue up 13% after a revamp that included an updated brand logo, improved packaging and TV advertising, as well as new product development such as Unicorn and Flamingo slices.
The company said food brands had largely been protected from a wider slowdown in consumer spending.
“The group recognises the challenging time experienced by the wider consumer sector in recent months. However, it notes a clear disparity between revenue trends in the food sector compared to the non-food sector of the UK consumer goods market, with food sector sales demonstrating stronger trends over several months,” Premier Foods said.
“In addition, while the rate of general inflation previously ran ahead of average earnings approximately a year ago, this trend has now reversed and accordingly purchasing power for consumers has strengthened.”
By Angela Monaghan
