There was now a “four-and-a-half-year window to turn the business around”, and space to focus on trading.
Premier, which currently has net debts of £1.27bn, is selling off its non-core businesses to focus on eight key ‘power brands’ in a bid to get trading onto an even keel.
Build momentum
Clarke commented: “We have a lot on our plate, but we are pleased with the way things are going. As we divest businesses we can increasingly pay down debt and build momentum behind our eight power brands.”
The company was already over halfway through its programme of divesting non-core brands, Clarke said.
It sold its Elephant Atta ethnic flour business, Sarson’s vinegars and pickles business and its four Irish Brands comprising Chivers, Gateaux, McDonnells and the Erin licence in the latest half-year period.
Clarke said that a number of further potential sales were being worked on, but revealing details would make it difficult to “keep parties in play”.
Premier would finish “well ahead” of the two-and-a-half-year deadline it had been given to make £330M disposals following a £1.4bn bail out by its financial backers in March.
Further savings
The Ambrosia to Hovis manufacturer is ahead of its targets on cutting its costs, it is on track to save £40M by the end of 2012 rather than by the end of 2013 as it had initially planned. It would announce further savings for 2013 after it had finished divesting non-core brands, Clarke said.
In the next six months the company was set to announce plans to move the Hovis brand “beyond bread” and make it into a “health and wellness”umbrella brand, Clarke said.
Premier’s bakery, milling and logistics operations were “structurally complex” Clarke suggested and would be targeted for efficiencies.
Premier would make better use of resources here, working with unnamed third parties, Clarke said. Details of the plans were yet to be revealed, he added.
And he appealed to retailers and consumers to support British brands in hard economic times, in the same way Britain was rallying behind its athletes during the Olympic Games.
Premier was a “quintessential” British business, he said, sourcing 82% of its input costs from the domestic market.
Hovis, for example, was the only major British bread brand that used 100% British-grown wheat.
Clarke, who joined the debt-laden manufacturer on August 16, 2011, said that with bank financing now secured to June 2016, there had been good progress in stabilising the business and “fixing things from the past”.
