Premier Foods Says First-Half Profit May Suffer on Cost Rises
Premier Foods Plc (PFD), the U.K.’s biggest food manufacturer, said first-half gross profit may suffer as the company seeks to negotiate price increases to make up for rising costs.
Percentage increases in raw materials costs are “in the low teens,” the St. Albans, England-based company said in a statement on the Regulatory News Service. Also, grocery markets “got off to a slow start” this year, with first-quarter sales dropping 3.1 percent, the company said.
Global food prices are rising as demand for meat, edible oils and corn increases. Premier said that, while it was able to raise its prices to cover cost increases through the end of March, inflation “remains an issue.”
“We continue to anticipate making progress in 2011, but due to the pricing lag and the slow start to the year, the profit delivery will be more weighted to the second half in 2011 than in 2010,” the company said in the statement.
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