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Highlights

  • Berenberg analyst assigns a BUY rating with a price target of GBp 270, indicating a potential 35.14% upside.

  • FY25 performance surpasses expectations with 8.8% rise in adjusted pre-tax profit and 10% EPS growth.

  • Final dividend up 62% year-on-year, signalling significant cash generation and shareholder returns.

Premier Foods plc (LSE:PFD), one of the UK’s largest food producers, has received a positive endorsement from Berenberg analyst Matthew Abraham, who maintained a BUY rating on the stock and issued a target price of GBp 270. This represents a potential 35.14% upside from current levels.

The analyst’s rating stands out in a landscape of limited disclosed recommendations and aligns with the company's recent financial performance, brand momentum, and improved shareholder returns.

FY25 Results Reinforce Investment Thesis

Premier Foods recently reported its preliminary results for the 52 weeks ended 29 March 2025, showcasing a year of broad-based growth. Total branded revenue rose by 5.2%, supported by branded volume expansion and demand across key categories.

Segment-wise, the company delivered a 4.6% increase in grocery branded revenue and a 7.3% rise in sweet treats branded revenue. This helped Premier Foods post an 8.8% increase in adjusted profit before tax to £169.3 million. Profit after tax was up 11.0%, and basic earnings per share grew by 10.0% to 14.3 pence.

Additionally, the company gained market share both in volume (+80bps) and value (+21bps).

Dividend Boost 

Premier Foods proposed a final dividend of 2.8 pence per share for FY25, a 62.0% increase over the previous year. This dividend uplift also marks a shift in capital allocation policy, as the company no longer matches payments to its pension scheme.

With significant cash flow, the Group has increased its capital investment by 26% to GBP 41.4 million, focused on enhancing efficiency and expanding capacity. The redeployment of capital toward both growth initiatives and shareholder returns has been a key strategic pivot for the company.

International Expansion and New Categories Gain Traction

Premier Foods continues to diversify and scale its portfolio. Revenues from new categories grew by 46%, supported by performances across The Spice Tailor and FUEL10K, both of which reported double-digit growth. International revenue also surged by 23%, achieving double-digit growth in all target regions, reflecting successful execution of its global expansion strategy.

Looking ahead, the company expects revenue growth to be balanced between volume and price/mix improvements, supported by ongoing innovation, M&A exploration, and further progress on its strategic pillars.