Premier Foods aims for 4 per cent savings through supply chain

21 March 2012

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21 March 2012 | Angeline Albert

Premier Foods is targeting supply chain savings of 4 per cent as part of a growth strategy after suffering an operating loss of £259.1 million.

In its full year results for the year ended 31 December 2011, the company announced a re-financing package with its banking partners to help it get back on track.

In 2010, the group’s operational profit before tax was £28.5 million. It blamed a challenging consumer environment and a fall in sales for the loss.

The operator of brands such as Hovis, Mr Kipling and Bisto said it would target savings of 4 per cent in the supply chain by controlling manufacturing costs, such as raw materials and equipment.

In the results, the company also said the procurement function’s work had delivered “gains” of £14 million, which included savings and fluctuations in commodity prices.

“We continue to generate savings in the supply chain both in increasing manufacturing efficiency at our sites and through procurement gains,” its statement said. “Over the medium term, the group expects a return to sales growth and higher gross margins. This will be supported by further sustained increases in marketing investment and a continuation of cost reduction and efficiency programmes.”

In 2011, the group disposed of its meat-free business - incorporating the Quorn and Cauldron brands - the canned grocery operations business and the Brookes Avana chilled ready meals and cake business. This meant the group purchased fewer goods in total.

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