Premier Foods is due to receive an unexpected £33m injection of cash, after securing an ‘earlier than expected’ agreement to halt its pension deficit contribution payments next month.
The FMCG giant, whose portfolio includes household brands such as Mr Kiplings, Ambrosia and Bisto, said it reached a deal with the RHM Pension Scheme Trustee to suspend the contribution from 1 April.
The company informed markets, adding that it had taken place “earlier than originally expected, reflecting the strong performance of the pension scheme, following the segregated merger” in June 2020.
Premier Foods 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 the expected full resolution of the Scheme by the end of 2026.
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“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.”
Premier Foods added that it expected the £5m annual administrations costs of running the pension scheme to remain “unchanged”.
Earlier this year, the food manufacturer revealed it was set to roll out more price cuts across its range of brands following strong sales over the golden quarter.
