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1. Company Snapshot

1.a. Company Description

Premier Foods plc, together with its subsidiaries, manufactures and distributes branded and own label food products in the United Kingdom, other European countries, and internationally.The company operates through Grocery, Sweet Treats, and International segments.It offers a portfolio of product categories, including flavorings and seasonings under the Bisto, OXO, and Paxo brands; cooking sauces and accompaniments under the Sharwood's, Loyd Grossman, and Homepride brands; and quick meals, snacks, and soups under the Batchelors and Smash brands.


The company's products portfolio also comprises ambient desserts under the Ambrosia, Bird's, and Angel Delight brands; and ambient cakes under the Mr Kipling, Cadbury, and Lyons brands.It offers its products through supermarkets, discounters, convenience stores, and wholesale and food service facilities, as well as through e-commerce channels.The company was founded in 1975 and is headquartered in Saint Albans, the United Kingdom.

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1.b. Last Insights on PFD

Premier Foods' recent performance has been impacted by intensifying competition in the food industry. The company's acquisition strategy, evident in the purchase of Merchant Gourmet, may face challenges from rival companies. Moreover, a potential deal between ABF and Hovis could create a bread giant, posing a threat to Premier Foods' market share. Additionally, a slowdown in sales growth, as seen in Woolworths Group's 2.7% Q1 sales growth, may indicate a challenging environment for food companies. Rising production costs and investment in Ambrosia production may also weigh on profitability.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Premier Foods invests in UK plant for Loyd Grossman cooking sauces

Nov -18

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Woolworths Group registers 2.7% growth in Q1 sales for FY26

Oct -29

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Premier Foods invests in Ambrosia production

Sep -22

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Premier Foods plc's (LON:PFD) Stock Has Shown Weakness Lately But Financial Prospects Look Decent: Is The Market Wrong?

Sep -07

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Finger on the pulses – Premier’s latest deal cheers City

Aug -27

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Premier Foods builds M&A profile with Merchant Gourmet deal

Aug -21

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Kingsmill owner ABF to buy Hovis to create bread giant

Aug -15

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Shoppers flock to sweet treats inspired by US trends, Mr Kipling owner says

Jul -17

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.76%)

6. Segments

Grocery

Expected Growth: 3.5%

Premier Foods plc's Grocery segment growth of 3.5% is driven by increasing demand for convenient and healthy food options, successful product innovation, and strategic partnerships with major retailers. Additionally, the company's focus on cost savings and operational efficiencies has enabled it to invest in marketing and promotional activities, further boosting sales.

Sweet Treats

Expected Growth: 4.5%

Sweet Treats from Premier Foods plc achieves 4.5% growth driven by increasing demand for convenience foods, premiumization of sweet treats, and successful product innovation. Additionally, the segment benefits from a strong brand portfolio, effective marketing strategies, and a growing online presence, further boosting sales.

7. Detailed Products

Ambrosia

A brand of custard and rice pudding desserts

Batchelors

A brand of canned goods, including beans, soups, and vegetables

Bisto

A brand of gravy granules and other seasonings

Cadbury Cakes

A brand of packaged cakes and snacks, including chocolate cakes and biscuits

Homepride

A brand of flour and baking products

Lloyd Grossman

A brand of Indian and Italian sauces and cooking products

Mr Kipling

A brand of packaged cakes and snacks, including fruit pies and tarts

Oxo

A brand of stock cubes and other seasonings

Sharwood's

A brand of Asian-style sauces and cooking products

8. Premier Foods plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Premier Foods plc operates in a market with some substitutes, but they are not a significant threat to the company's products. The company's strong brand portfolio and product offerings help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Premier Foods plc has a diverse customer base, which reduces the bargaining power of individual customers. The company's strong relationships with its customers also help to mitigate the bargaining power of customers.

Bargaining Power Of Suppliers

Premier Foods plc has a moderate level of bargaining power over its suppliers. The company's size and scale of operations give it some negotiating power, but the suppliers of certain ingredients and materials may still have some bargaining power.

Threat Of New Entrants

The threat of new entrants in the food manufacturing industry is low due to the high barriers to entry, including the need for significant capital investment and regulatory compliance. Premier Foods plc's established brand portfolio and manufacturing capabilities also make it difficult for new entrants to compete.

Intensity Of Rivalry

The intensity of rivalry in the food manufacturing industry is high, with many established players competing for market share. Premier Foods plc faces intense competition from other food manufacturers, which can lead to pricing pressure and advertising expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.84%
Debt Cost 8.99%
Equity Weight 80.16%
Equity Cost 8.99%
WACC 8.99%
Leverage 24.75%

11. Quality Control: Premier Foods plc passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Savencia

A-Score: 6.5/10

Value: 8.8

Growth: 6.2

Quality: 2.7

Yield: 5.0

Momentum: 7.5

Volatility: 9.0

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AGRANA

A-Score: 6.5/10

Value: 8.7

Growth: 5.1

Quality: 2.8

Yield: 8.1

Momentum: 7.5

Volatility: 6.7

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Premier Foods

A-Score: 5.9/10

Value: 6.2

Growth: 6.7

Quality: 6.6

Yield: 1.9

Momentum: 5.0

Volatility: 9.3

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Bakkavor

A-Score: 5.7/10

Value: 4.8

Growth: 5.2

Quality: 3.8

Yield: 6.9

Momentum: 9.0

Volatility: 4.7

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Scandi Standard

A-Score: 5.3/10

Value: 4.3

Growth: 5.3

Quality: 3.6

Yield: 3.8

Momentum: 7.5

Volatility: 7.3

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Bell Food Group

A-Score: 5.1/10

Value: 6.5

Growth: 4.0

Quality: 3.3

Yield: 5.0

Momentum: 2.0

Volatility: 10.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.78$

Current Price

1.78$

Potential

-0.00%

Expected Cash-Flows