Logistics challenges at Premier’s Sweet Treats business

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Premier Foods is experiencing some operational challenges with the implementation of the final Sweet Treats phase of its logistics transformation programme, chief executive Gavin Darby has warned in the company’s half year results.

Phase 3 of the logistics transition started in the second quarter. The company said the ramp up to expected operational performance by the third party provider was behind the original plan, while customer services levels were currently “below normal high standards but improving”.

It said revenue in the Sweet Treats division, which includes Mr Kipling, is expected to be impacted in the third quarter, although grocery revenue is not expected to be affected.

The company said its Brexit risk management strategy includes building up stocks of raw materials  and “close collaboration with suppliers and customers to explore stock building”.

Group revenue for the half year to 29th September was £358 million, up from £353.3m last year. Operating profit rose for £22.5m in the first half of 2017 to £28.3m this year. However, after finance costs, the business made a pre-tax loss of £2.2m.

The strategy for improving operational performance includes focusing resources on areas of the business with the best growth potential and consequently it has put its Ambrosia business up for sale.

Premier Foods restructures logistics

 

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