Premier Foods to suspend pensions deficit payments early

Premier Foods said on Wednesday that it will benefit from £33m increased free cash flow in the financial year to 29 March 2025 after reaching an agreement with the trustee of its pension scheme to suspend pension deficit contribution payments from 1 April 2024.

The company - which owns Bisto, Ambrosia, Bird’s and Batchelors, among others - said the 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".

Administration costs associated with running the pension scheme of around £5m per year and the dividend match mechanism are currently unchanged.

Chief financial officer Duncan Leggett 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."