Hovis revamp boosts Premier Foods

Hovis sales were boosted by a new ad campaign

A successful relaunch of Hovis bread helped to lift sales at Premier Foods last year, the company has said.

It said Hovis sales were expected to have risen 13% in 2008 after a major advertising campaign and new packaging.

Premier, which also makes Mr Kipling cakes and Branston pickle, said total sales for 2008 were up by 9%.

The firm added that it was reviewing "a range of options" to cut its debts of £1.78bn. Last year, its shares sank 90% on worries over its debt burden.

Premier's debts have risen sharply in the past two years after it acquired RHM, which owned Hovis, and the UK arm of Campbell's Soup, which held the Oxo and Homepride brands.

'Significant momentum'

Premier said it had been "delighted" with the response to the relaunch of the Hovis brand, which had seen it grow market share as well as sales.

The television advert for Hovis shows a boy travelling through time as he brings a loaf of Hovis back from the baker's to his home.

Premier said sales in its grocery division - which includes brands such as Batchelors soups, Crosse & Blackwell convenience foods and Fray Bentos meat pies - were expected to have risen 7% in 2008 from the year before, with sales in the second half of the year up 11%.

"The significant momentum we have generated in the second half of 2008 in both our grocery and Hovis divisions and the enhanced efficiency of our manufacturing base give us confidence that Premier is well positioned to meet the challenges of the current economic downturn," said chief executive Robert Schofield.

"Our review of our capital structure is progressing well, discussions with stakeholders are constructive and we will provide a further update with our preliminary results," he said.