The FTSE 100 is bobbing around the unchanged mark but luckily the food sector is serving up some welcome activity. It is a tale of two food companies as caterer Compass powers ahead while Mr Kipling maker Premier Foods heads the other way as it struggles to reassure the market it has its balance sheet under control.
First to Compass, one of the biggest risers in a slightly softer FTSE 100 after it told the market first-quarter profits were ahead of expectations.
The shares are up 11.5p, or 3.7%, at 325.25p after the world's biggest caterer said ahead of its AGM that it has enjoyed "a strong first quarter". "Margins are continuing to improve and operating profit is running well ahead of last year's first quarter and marginally ahead of expectations," it added.
Compass, which in the UK is the largest private sector school dinners supplier, said it was managing to cope with rising food prices.
Talking of food inflation, which economists expect will only intensify this year thanks to big demand and recent droughts, Premier Foods is being battered by market fears the Hovis bread maker is increasingly unable to cope with rising costs.
Premier, also home to Ambrosia custard and Branston pickle is down 17.5p, or 14.6%, at 102.5p - the biggest FTSE 250 faller - despite attempts to reassure investors. It insisted this morning it was not contemplating a rights issue, contrary to City speculation.
"Based on our expected financial results for 2007, we are not in breach of our financial covenants as at December 2007 and, based on our latest financial projections, we do not expect to be in breach on an ongoing basis," it said in a statement.
