Premier Foods CEO survives re-election vote; Q1 sales up 1.7%

The chief executive officer of Mr Kipling and Bisto owner Premier Foods survived an attempt to oust him on Wednesday, as the company posted a rise in first-quarter total group sales and said expectations for the year remain unchanged.

At the company's annual general meeting, 59% of shareholders voted in favour of Gavin Darby's re-election, after shareholders Oasis Management and Paulson & co called on other shareholders to push him out.

Chairman Keith Hamill said: "A majority of shareholders who voted followed the board's advice in supporting the re-election of Gavin Darby, CEO, to the board of the company, and the board appreciates their support.

"Over recent weeks we have had discussions with a substantial proportion of the major shareholders, which has included listening to the concerns expressed by those whose support we have still to earn. The board will give careful consideration to all shareholders' views. Discussions with shareholders will continue, including matters arising from voting at the AGM."

"The board is committed to continuing its strategy of improving performance and reducing net debt, while working in parallel to identify other strategic opportunities to accelerate the company's turnaround to create value for shareholders."

Earlier on Wednesday, the group releases a trading update for the 13 weeks to June, which revealed that total sales were up 1.7%, with branded sales 1.1% higher and non-branded sales up 4.8%. Meanwhile, international sales grew 4% during the quarter.

The company said sales were driven by a particularly good performance from its largest brand, Mr Kipling, following a relaunch in March. In the grocery business, Batchelors continued to display the "excellent" growth trend it has deliver over the las t year, while sales of Bisto were slower towards the end of the first quarter as category volumes dropped due to the warmer weather.

Angel Delight saw double-digit sales growth again in the first quarter, while Loyd Grossman sales were fell due to changes in the phasing of promotional activity. Nissin branded products Soba Noodles and Cup Noodle grew by nearly 80% compared to the same period a year ago.

Cadbury cake sales in the UK were lower in the early part of the quarter as expected due to Easter falling in the previous quarter, while non-branded sales were down £0.4m as the group exited two customer contracts.

"The group's expectations for progress in its key priorities in the full year remains unchanged, and as previously communicated, weighted to the second half of the year. The board is committed to continuing its strategy of improving performance and reducing net debt by £25m per annum, while working in parallel to identify other strategic opportunities to accelerate the company's turnaround to create value for shareholders."

At 1640 BST, the shares were down 4.2% to 44.85p.