Premier Foods sets out logistics restructuring plan

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Premier Foods, which makes Hovis bread and Branston pickle, is looking for £20 million in savings from logistics and head office restructuring.

The group recently completed the sale of its canned grocery business. As a result, it said: “We have the opportunity to significantly simplify the business. The logistics operation for the grocery business can be remodelled as Canning accounted for half the volumes carried.

“The new supply chain will have smaller warehouses located nearer to the remaining Grocery manufacturing sites. This will entail some onerous lease costs and dilapidations for the old warehouses, redundancy or relocation costs for the affected people and set up costs for the new sites.”

Premier Foods’ brands include: Bisto, Mr Kipling, Sharwoods, Hartleys, Oxo, Branson and Hovis.

The company said in its interim results that operating profit for the first half was down 33 per cent to £42m on flat sales of £974m.

Distribution costs for the half year were down 5.1 per cent to £93m owing to lower volumes and efficiency savings from both the grocery and Hovis businesses.

Chief Financial Officer, Jim Smart said: “We were successful in passing on the majority of our higher input costs, completed two significant disposals and reduced our borrowings. We have continued to deliver efficiencies in line with our targets and have now commenced a further cost saving programme.”

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