Up until very recently the food manufacturer – with brands including Angel Delight, Super Noodles, Bisto and Mr Kipling – had been having a rather meh year. Opening at 41.15p, it had trickled to a 3 year-plus low of 35.62p by early May.
However, developments in July, namely news that Oasis Management had upped their stake in the firm to 17.3% with an eye on ousting CEO Gavin Darby sent the stock rocketing higher, with Premier Foods PLC now at a current trading price, and 18 month peak, of 46.65p.
The company’s most recent update came in mid-May, when it released its full year results. There Premier Foods revealed a whopping 74% surge in pre-tax profit to £20.9 million, following a 3.6% increase in revenue to a 5 year high of £819.2 million, with that latter number helped by strategic partnerships with Nissin and Mondelez International delivering 55% of the growth. Basic earnings, meanwhile, rose 28.6%, from 0.7p to 0.9p per share.
Even though Wednesday sees Premier Foods release its first quarter figures, with investors wanted a continuation of the strong performance seen in the last financial year, the headlines are going to be centred on the AGM. As mentioned, Oasis Management, with the support of Paulson & Co, which has a 6.2% stake, are looking to get rid of chief exec Darby due to ‘years of persistent shareholder value destruction’. They have a fight on their hands, however, given that Japan’s Nissin Foods, which has a 20% stake, is reportedly backing Darby.
Premier Foods (LON:PFD) has a consensus rating of ‘Hold’ alongside an average target price of 41p.
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