Premier Foods – ahead of Thursday’s AGM and Q1 Trading Update, its shares up 30% in the last year are still appealing at 191.80p, TP 270p

14.07.2025

In early April last year, I featured the investment attractions of Premier Foods (LON:PFD) with its shares then trading at around 147p, noting the possibility of a bid for the group at 180p or thereabouts.

Three months later, ahead of the group holding its AGM to approve the 2024 Report & Accounts, as well as announcing its First Quarter Trading Update on the same day, the shares were up to 166p, having touched 180.20p within those intervening three months, but I then noted that its shares were underrated and could so easily break up over the 200p level.

Now, one year later and still no bid, we are days away from the 2025 AGM and the Q1 Trading Update, due this coming Thursday, 17^th July.

Over the last year, the £1.70bn-capitalised food group’s shares have peaked at 216.50p in late May this year, before easing back to trade now at 191.80p.

So, what has happened in between?

The over-30% rise from 147p is impressive enough but is there more to come?

The answer is very positive and could well be strengthened by this week’s imminent Trading Update, certainly good enough to show that there is so much more to expect.

The Business

In around 89% of UK households, you will find Premier Foods products.

The food producer’s brands include Ambrosia, Angel Delight, Atora, Batchelors, Be-Ro, Bird’s, Bisto, FUEL10K, Homepride, Loyd Grossman, Marvel, McDougalls, Mr Kipling, OXO, Paxo, Plantastic, Saxa, Sharwoods, Smash, The Spice Tailor, and also a licence with Cadburys for cakes, home baking and ambient dessert products.

Its various brands achieve #1 status in their key categories.

Some 88% of the group’s total revenues are derived from its own branded products.

The group, which has over 4,000 employees, operates from 13 sites in the UK and adopts a multi-format, multi-channel approach to serving a broad range of customers, including major UK supermarkets, discounters, e-commerce channels, convenience stores, wholesalers and foodservice operators.

The Equity

The group’s largest shareholder is Nissin Foods Holdings, the Japanese-based but totally global noodles and snack pot business, with 24.27% of the equity.

With some 869m shares in issue, other large holders include Van Lanschot Kempen Investment Management (6.96%), JP Morgan Asset Management (5.11%), Brandes Investment Partners (4.86%), M&G Investment Management (4.36%), Dimensional Fund Advisors (3.56%), Paulson & Co (2.94%), abrdn Investment Management (2.94%), The Vanguard Group (2.81%) and BlackRock Investment Management (2.58%).

Analyst Views

There are some six analysts following the company, the consensus of which rates its shares as a Buy.

The average Target Price is 236p, the lowest being 220p, while the highest is 270p.

Analysts Clive Black and Darren Shirley, at Shore Capital Markets, have a positive view of the group and its prospects.

Their estimates for the current year to end-March 2026 are for revenues to rise to £1,182m (£1,148m), with adjusted pre-tax profits increasing to £172.7m (£169.3m), generating earnings of 14.6p (14.3p) and paying a dividend of 3.4p (2.8p) per share.

For the 2027 year they see £1,218m sales, £180.5m profits, 15.2p of earnings and a 4.0p per share dividend.

In My View

This cash-generative group is never going to set the market ablaze, unless a bidding war emerges; however, I do believe that its shares offer investors good capital growth.

Now at 191.80p, they are a Buy in front of this week’s statements.