Broker snap: Premier Foods reassures but unexciting

5th Aug 2009 12:37

Hovis to Branston pickle maker Premier Foods first half results provided investors with some reassurance, headline numbers emerging in line with expectations and guidance indicating that full-year profit expectations will be met, Charles Stanley says.Unlike many food producers, however, who are enjoying the benefit associated with a fall in food price inflation from 11.2% in January to 5.5% in June, Premier continues to experience cost tail winds, in part currency-related and in part down to a highly diversified cost base associated with the fragmented nature of its product portfolio. Estimates are unlikely to be altered in the wake of the interim results and Stanley's recommendation, based on a prospective P/E multiple of 6.5 times, remains 'Hold'.