Posted: Tuesday, January 17, 2012 4:42 pm

Premier Foods has announced plans to streamline and sell off non-core businesses and cut around 600 staff with the aim of restoring profitable growth. 

The company say this action is in line with the five point priorities that it set out in October last year: investing behind eight 'Power Brands'; divesting selected businesses to sharpen focus; strengthening capabilities, especially sales and marketing; right-sizing and reducing the company's cost base; and agreeing a re-financing package with the banks.

The brands which Premier Foods will be focusing investment behind are Hovis, Ambrosia, Mr. Kipling, Sharwood's, Lloyd Grossman, Bisto, Oxo and Batchelors. The Group is planning to double marketing spend behind these brands in 2012 and six of the Power Brands will be back on TV with advertising in the first quarter, spearheading a full programme of new product innovation, promotions and marketing throughout the year.

The Group say these measures will enable it to meet its cost saving targets. In October, the Group stated that it would significantly exceed the £20 million cost savings by 2013 that it announced at the 2011 Half Year. The Group now expects to more than double the original £20 million cost reduction target to over £40 million by 2013.

The Group also confirms that the key Christmas trading period has been in line with its expectations and that, accordingly, management expects the overall Group financial results for 2011, both reported and underlying, to be at the lower end of current market expectations. 

Discussions with the company’s banks over a re-financing package continue to make progress and it is anticipated that an appropriate agreement will be reached soon.   

Commenting on the Group's plans, Michael Clarke, Chief Executive Officer, said:“We continue to deliver on our plans to stabilise the business and invest in our recovery and future growth.While decisions to reduce the workforce are always difficult, I’m convinced we are taking the right steps in the long term interests of the business, employees and our stakeholder."