6 March 2024
Premier Foods plc ("Premier
Foods", the "Group" or the "Company")
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Suspension of pension deficit
payments
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Premier Foods is pleased to announce
that it has reached agreement with the RHM Pension Scheme
Trustee4 to suspend pension deficit contribution
payments from 1 April 20245. This suspension of future
contributions is taking place earlier than originally expected,
reflecting the strong performance of the pension scheme, following
the segregated merger in June 2020.
As a result, the Group will benefit
from £33m increased free cash flow for the financial year ending 29
March 2025, and subject to the results of the next triennial
valuation, the Group anticipates no further contributions to be
payable after this date.2 Administration costs
associated with running the pension scheme of c.£5m per annum and
the dividend match6 mechanism are currently
unchanged.
Duncan Leggett, Chief Financial
Officer, said:
"The further significant progress in the funding position of
the pension scheme has enabled us to take another important step to
expected full resolution of the Scheme by the end of 2026. This
suspension of pension payments substantially increases the free
cash flow available to us and presents us with enhanced capital
allocation options to deliver on our growth ambitions. The Scheme
has reached this position following strong stewardship by the
Trustee over many years and we will continue to work
collaboratively with them to further de-risk the
Scheme."
This
announcement contains inside information for the purposes of
Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms
part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR").
~ Ends
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Contacts:
Institutional investors and analysts:
Duncan Leggett, Chief Financial
Officer
Richard Godden, Director of Investor
Relations
Investor.relations@premierfoods.co.uk
Media enquiries:
Sarah Henderson, Director of
Communications
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Headland
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Ed
Young
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+44 (0) 7884 666830
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Jack Gault
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+44 (0) 7799 089357
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Notes to
editors:
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1.
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The last actuarial triennial
valuation of the Scheme, as at 31 March 2022, showed a surplus in
the RHM section of £665m and a deficit of the Premier Foods section
of £368m. The last buyout surplus for the RHM section as at 31
March 2022 was +£100m.
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2.
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The next triennial valuation of the
Scheme is at 31 March 2025. In the event that the Scheme is under
funded as at 31 March 2025, deficit contributions may
recommence.
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3.
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The Group expects to pay pension
deficit contributions of £33m to the Scheme for the financial year
ending 30 March 2024.
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4.
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The RHM Pension Scheme Trustee
manages the RHM and Premier Foods sections of the pension
scheme.
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5.
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The Group has arranged Letters of
Credit in favour of the Scheme, equal to the suspended deficit
contributions.
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6.
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Dividend match mechanism: Of the
first £5 million paid to shareholders as a dividend, a payment of
50 pence for every £1 paid to shareholders is payable to the
Scheme. For any dividend paid between £5m and £10m, there is no
matching payment made to the Scheme. For any dividend paid above
£10m, a payment of 50 pence for every £1 paid to shareholders is
payable.
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As one of the UK's largest food
businesses, we're passionate about
food and believe each and every day we have the opportunity to
enrich life for everyone. Premier
Foods employs over 4,000 people operating from 15 sites across the
country, supplying a range of retail,
wholesale, foodservice and other customers
with our iconic brands which feature in millions of homes every
day.
Through some of the nation's
best-loved brands, including Ambrosia, Batchelors,
Bisto, Loyd Grossman, Mr. Kipling, Oxo and
Sharwood's, we're creating great
tasting products that contribute to healthy and balanced diets,
while committing to nurturing our people and our local communities,
and going further in the pursuit of a healthier
planet, in line with our Purpose of
'Enriching Life Through Food'.
This announcement may contain
"forward-looking statements" that are based on estimates and
assumptions and are subject to risks and uncertainties.
Forward-looking statements are all statements other than statements
of historical fact or statements in the present tense, and can be
identified by words such as "targets", "aims", "aspires",
"assumes", "believes", "estimates", "anticipates", "expects",
"intends", "hopes", "may", "would", "should", "could", "will",
"plans", "predicts" and "potential", as well as the negatives of
these terms and other words of similar meaning. Any forward-looking
statements in this announcement are made based upon Premier Foods'
estimates, expectations and beliefs concerning future events
affecting the Group and subject to a number of known and unknown
risks and uncertainties. Such forward-looking statements are based
on numerous assumptions regarding the Premier Foods Group's present
and future business strategies and the environment in which it will
operate, which may prove not to be accurate. Premier Foods cautions
that these forward-looking statements are not guarantees and that
actual results could differ materially from those expressed or
implied in these forward-looking statements. Undue reliance should,
therefore, not be placed on such forward-looking statements. Any
forward-looking statements contained in this announcement apply
only as at the date of this announcement and are not intended to
give any assurance as to future results. Premier Foods will update
this announcement as required by applicable law, including the
Prospectus Rules, the Listing Rules, the Disclosure and
Transparency Rules, London Stock Exchange and any other applicable
law or regulations, but otherwise expressly disclaims any
obligation or undertaking to update or revise any forward-looking
statement, whether as a result of new information, future
developments or otherwise.