16 February 2011 | Lindsay Clark
Manufacturer Premier Foods has succeeded in
increasing its profits against a backdrop of falling sales, in part down to
improved procurement performance.
The firm’s financial results, published
yesterday, said: “Procurement gains from working more strategically
with our suppliers added £16 million to the grocery trading profit.”
The company, which makes well-known brands including Hovis, Mr Kipling
and Branston, reported that sales had fallen by 3.5 per cent to £2.57 billion,
in the year to December 2010. However, adjusted profit – before tax but after
paying off some debt and selling part of the business – had grown by 6.4 per
cent to £166 million over the same period.
Chief executive officer Robert Schofield said: “Our business has
proved resilient, with branded volume market share growth, increased margin
from procurement and manufacturing efficiency and lower operating expenses.
There is more to do in each of these areas and we have aligned the
organisational structure behind the strategy of growing our brands.”
In November last year, group procurement director Mark Hughes, told SM the company had a target of reducing
manufacturing controllable cost by 4 per cent year-on-year, which was jointly supported
by procurement and operations teams. This helped cut its supplier base to
create a more productive relationship with its top vendors. Speaking then,
Hughes said: “We have actually cut our supplier numbers by 11 per cent in the
latest quarter, and our top 100 suppliers, which represent 45 per cent of our
spend, have experienced real growth of 33 per cent over the past three years.”