By Radhika Anilkumar
(Reuters) -Britain’s Premier Foods raised its profit forecast for the year and said that it would cut prices of some of its popular products helped by easing costs, lifting its shares in early trade.
As some input costs start to soften, major brands like Mr. Kipling and Batcherlors are back to prices they were at in the summer of 2022, CEO Alex Whitehouse said in a call with media, adding that Premier was looking at more initiatives to reduce prices in the second half of the year.
Premier, like many companies, had raised prices to keep up with soaring inflation in Britain which peaked in October last year at 11.1%.
It currently expects its 2023-24 trading profit to be 10% ahead of last year’s 157.5 million pounds ($195.16 million).
Analysts on average had forecast about 166 million pounds, according to a company-compiled consensus.
Gradually cooling food inflation has brought some relief to the grocery sector at a time when consumers are cutting back on non-essential spending and choosing more economical options like a home cooked meal amid the cost-of-living crisis.
When purse strings are a bit tight, consumers tend to skip eating out or getting takeaway food and prefer cooking at home, Whitehouse added.
From plain flour to cakes and cooking sauces to quick meals, Premier Foods sells a range of products including OXO cubes and Ambrosia custard through supermarkets, convenient stores, discounters and other channels mainly in the United Kingdom.
Premier reported a 21.2% rise in adjusted profit before tax for the six months ended on Sept. 30, as it gained 113 basis points market share in the grocery categories.
Shares in the company, which have gained about 20% so far this year, were up 2.8% to 134.7 pence at 0943 GMT.
($1 = 0.8070 pounds)
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Subhranshu Sahu and Elaine Hardcastle)