Premier Foods, the business behind Mr Kipling cakes, has teamed up with the Great British Bake Off’s Paul Hollywood to launch a new range of home-baking products.
The company, whose other brands include McDougalls and Be-Ro as well as Bisto Oxo, and Sharwoods, also said it planned to take Mr. Kipling to America. It is planning a trial of Mr Kipling Apple, Fruit and Mississippi Mud Pies in 250 stores of a major US retailer during November.
The news came as the company reported a 21.6% rise in half year pretax profit to £28.1m, helped by a rise in branded good sales and the benefits of its investment programme. It said trading was still challenging, and it repeated its forecast of flat profits due to increased spending on marketing.
It said the venture with Paul Hollywood would help revitalise its home backing category, which is now worth £387m in the UK. It plans to launch a range of “premium, artisanal home-baking products under the Paul Hollywood name.” It added:
These exciting new products will be created in conjunction with Paul according to his exacting standards and recipes and reflecting his vision to make artisanal baking products more accessible to a wider audience.
The products will be produced at the company’s existing facilities and Paul will be instrumental in the marketing of the new range. The initial range of products includes 12 different bread, savoury and sweet mixes which are expected to be available in-store early in 2016.
Analyst Martin Deboo at Jefferies said:
The first half [result] reflects a return to growth and is ahead of our forecasts. Branded growth is in positive territory for the first time in two years. There is no change to full year profit guidance but a firmer commitment on marketing investment and on top-line in the third quarter and beyond.
The launch of a new brand with baker Paul Hollywood adds some suitable glitz... The sales impact might ultimately be small, but the symbolism isn’t: Premier are demonstrating a growing ability to capitalise on consumer trends, while people with reputations to lose are showing confidence in the company.
All in all this is a decent result from Premier, make no mistake, and bodes well for the future.
Premier Foods shares have jumped 7.25p or more than 20% to 43p.
