Premier Foods sees profits rise with IT transformation

Food producer Premier Foods has reported that a major technology-led integration programme is paying off in its first half results.

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Premier Foods, the manufacturer of famous food brands including Oxo cubes, Mr Kipling cakes and Batchelors soup, has reported that a major technology-led integration programme is paying off in its first half results.

Group turnover increased by 3.5 percent in the first six months of 2009 to 27 June 2009. The results are due to increased cost savings from a new ERP programme which is central to the integration of the Hovis and Campbell's businesses into Premier Foods. The ERP project involves a group-wide implementation of SAP software, with the aim to build central resilient services at a lower cost.

Premier Foods, based in St Albans, reported group turnover of £1,248.2 million. It said its brand sales grew by 8.3 percent, with Branston pickle seeing its sales rise by 41 percent and getting a special mention on the Radio 4 Today Programme. Hartley's Jam and Batchelors soup also saw sales increases of 12 and 14 percent respectively.

But chief executive Robert Schofield tempered the results with a warning that the economy will continue to be difficult. "We expect the consumer environment to remain tough but we will continue to invest in and support our brands to drive market share growth," he said.

"Cost inflation remains an issue which we will continue to offset through pricing and efficiency savings. Our integration programme, which is nearing completion, remains on track."

Premier Foods acquired bakers RHM and its Hovis brand in December 2006 and has been integrating the business into Premier Foods.

Schofield said, "Now that we have substantially completed the integration of RHM and Campbell's [acquired July 2006] and successfully refinanced the Group, we have been able to embark on targeted investment behind our market-leading brands."

Information systems director Mark Vickery has led the change programme to take the SAP platform in-house and founded a back office centre of excellence in Manchester that administers the SAP platform, as well as managing accounting, admin and pay for the entire Premier Foods group.

Vickery chose Manchester for its cluster of SAP experts, the implementation had previously been administered by Atos Origin.

Setting up the centre of excellence, professional fees and production commission costs around the SAP implementation was part of £16.9m costs that Premier Foods reported yesterday.

Read about Mark Vickery's strategy for IT in M&A.

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