Premier Foods has reported a drop in sales of some of its power brands.
The manufacturer noted that sales of brands such as Bisto, Sharwoods and Mr Kipling would be below its expectations and as a result downgraded its previous forecasts that power brand sales would increase by two to three per cent. Premier said that a "subdued grocery market" was to blame for its unexpected fall of power brands sales during the second quarter of the financial year.
However, the company stated that it did not need to issue a profit warning and was set to cut costs to ensure that it achieved the full-year profit expectations it had previously committed to. The news has also had a knock-on effect on the company's share with the stock price halving since early March and fell by a further six per cent to 54p.
Premier said in a statement: "While power brands sales for the second quarter are anticipated to be negative and below the company's expectations due to subdued grocery markets, profit expectations for the 12 months to December 31st 2014 remain unchanged, reflecting the company's ongoing focus on managing its costs."
There was more positive news Premier after it announced a joint venture with Speciality Powders. The agreement will see the production of powdered food goods at Premier's facility in Knighton, Staffordshire. The company's Brown & Polson home baking brand will be involved in the venture, which has been secured for the next five years.
Premier will work with Speciality Powders to produce brands such as Angel Delight, Bir'ds and Marvel. Speaking to the Grocer, Gavin Darby, chief executive of Premier Foods, described the partnership as being "innovative" and that it will help to "improve efficiency of Premier's Grocery infrastructure" while also benefiting with working with a highly experienced team in this field.