Broker snap: Premier Foods first quarter will disappoint

20th Apr 2011 12:19

Credit Suisse predicts that Premier Foods' interim management statement for the first quarter (due at the end of the month) will prove a little disappointing, but still keeps its 'outperform' rating on the Hovis bread and Branston pickle maker.Sales have got off to a very slow start this year, according to analyst Charles Mills: "We believe Premier Foods' markets are down something like 7% in Q1, and while the group has gained some share, its sales will still be off we'd guess something like 5%. So not a good start." However, the "truer comparatives really only start in the second quarter we believe," said Mills.Credit Suisse also awaits news on the group's bond issue (£250-500m) to diversify its debt profile which the broker thinks could lower its cost of funding by 150 basis points if successful. The 38p target price is retained.---bc