Price cuts affect Premier Food's profit

UK food manufacturer Premier Foods said its full-year pre-tax profit would be lower than market expe

The statement was made after its margins were hit by price cuts, sending its shares lower.

It expected to make a pre-tax profit of £165m in 2009 while the market expectation was £168m, according to a Thomson Reuters poll.

Premier said sales of its branded products, (accounting nearly two-thirds of its revenue) increased by 8.2 per cent in the fourth quarter, while sales across the full-year went up by 5.3 per cent.

However, Premier added that rising input and promotional costs had cut down its gross margin and it expects a flat trading profit year-on-year.

The company said it expected to a trading profit of £320m, up 3.5 per cent on the previous year.