Premier Foods is targeting gross supply chain savings of four per cent a year, after reporting an operating loss of £176.3m for 2011.
The group, whose brands include Hovis, Sharwood’s and Oxo, wrote off £282m in goodwill and asset impairment in its bread business following fierce competition in the bread market.
It said that during the coming year, the priorities would be to stabilise its operational performance, while enabling the business to increase its focus through selected disposals. “The Group… believes the planned increase in marketing investment, proposed cost reduction programmes, better customer collaboration and renewed focus across the Group will provide the platform to deliver future branded growth.”
Last August, Premier said it was looking for £20 million in savings from logistics and head office restructuring.
The move followed the sale of its canned grocery business. At the time, 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.”
It its 2011 results, Premier reported a ten per cent drop in sales to £2bn. It has agreed a refinancing package. As well as supply chain savings Premier has also set a target of doubling overhead savings to more than £40m by 2013.