Premier Foods PLC (LON:PFD) has posted a solid trading update ahead of a crucial vote which could see its chief executive ousted from his role.
The Bisto gravy granules and Ambrosia custard maker reported a 1.7% rise in its first-quarter sales compared with the same period a year ago.
That was driven by a “particularly good” performance from its Mr Kipling cakes on the back of a recent TV ad campaign and new packaging.
Mr Kipling’s strong showing helped sales of Premier’s branded sweet treats to rise 7.6%, although non-branded sweet treats – those which are made for supermarkets’ own ranges – fell 5.4%.
In its grocery division, new contract wins for its stuffing saw unbranded sales climb 9.1%, while branded sales fell 1.5%, largely due to a weaker performance from its Loyd Grossman sauces.
All eyes on AGM
The markets’ major focus on Wednesday will be on the annual general meeting though, where chief executive Gavin Darby faces a key vote on whether or not he should be re-elected.
Premier’s second and third largest shareholders, Oasis Management and Paulson & Co, have called on their fellow investors to get rid of Darby, with Oasis previously saying it had “completely lost faith” in the 61-year-old.
Their agitation stems from a rejected 65p a share offer made by US food giant McCormick back in 2016, and since then, the stock has lost almost 25%.
Board and top shareholder back CEO
The board has unanimously backed Darby though, while Premier’s largest shareholder, Nissin, has also given its backing to the under-fire boss.
Voting advisory services, Glass Lewis and Pensions & Investments Research Consultants, have urged Premier shareholders to vote in favour of Darby's re-election.
All eyes will be on the results from the AGM, which begins at 11am this morning (July 18), to see which parties shareholders have sided with.
Shares are down 4% to 45p on Wednesday morning ahead of the AGM.