Premier reveals boss to stand down and plans to sell off Ambrosia

Marco Green
November 15, 2018

It said talks to sell Ambrosia, which accounts for under 10 percent of its total revenues, were in early stages and that it expects strong demand for the dessert brand.

Darby will step down from the top job and as a director of the company with effect from 31 January, and the board will start its search for a successor.

Mr Kipling cake firm Premier Foods has said under-fire boss Gavin Darby will leave in January and revealed plans to sell off its Ambrosia brand as it looks to appease disgruntled shareholders.

Premier Foods' group sales rose by 1.3% to £358m, but pre-tax losses widened to £2.2m from £1.2m a year ago.

The moves follow a drawn-out battle with Oasis, which had been urging the board to oust Darby, saying he drove the company into a "zombie-like state".

Premier Foods has said it intends to stockpile raw materials in the run-up to Brexit as fears grow over gridlock at United Kingdom ports.

Net debt at the end of September edged up to £509.5m, up from £496.4m at the end of March.

Darby is stepping down after six stormy years at Premier Foods, and just months after surviving a shareholder revolt against his re-election, with activist investor Oasis claiming he lacked credibility.

Shares have not recovered since United States condiments giant McCormick failed to follow through on its 2016 takeover approach.

"Deepening of the food group's pre-tax losses meant any of his past attempts to retain his tenure were well and truly thwarted", she added.

Premier also revealed it plans to stockpile supplies in case the United Kingdom experiences a no-deal Brexit.

Mr Darby said that as part of a decision to focus on growth areas and cut back on debt it was in "discussions with third parties regarding the potential disposal of our Ambrosia brand".

The group, also behind well-known brands including Bisto and Oxo, said it was "shortly" to begin building up stocks of raw materials "in the absence of certainty over the arrangements for the UK's departure from the EU".

The firm said this had the potential to cause "an adverse movement of up to £10m in working capital", but it hoped to compensate for that outlay in the next financial year.

The company also said it was now in negotiations with third parties regarding a potential disposal of Ambrosia.

The company said on Tuesday it would step up investments in marketing and high-return capital projects, adding that it was pursuing options to fund these plans while also delivering "a meaningful reduction" in net debt.

Other reports by Click Lancashire

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