Premier Foods agrees £32m reduction in pension scheme obligations

Premier Foods said on Tuesday that its pension scheme costs will be £32m lower over the next three financial years than it had outlined in its interim results back in November.

The maker of Mr Kipling cakes said the new agreement with the trustees of its pension scheme includes the reduction and rephrasing of deficit contributions to the Premier Foods schemes and no contributions to the RHM schemes in the recovery plans, while administration costs over the next three years will be part-funded by RHM schemes by £2m a year.

Chief financial officer Alastair Murray said: "We are pleased to have agreed a reduction in our pension scheme obligations with the scheme trustees as we continue to focus on maximising the Company's free cash flow generation and debt reduction.

"While this has been a challenging negotiation, we appreciate the open and constructive dialogue which has taken place with all pension scheme trustees in arriving at this revised agreement."

At 0943 BST, the shares were up 2% to 45.12p.