Premier Foods’ embattled chief executive Gavin Darby has insisted his strategy for the company is ‘delivering results.’
Darby faced a shareholder rebellion at the group’s annual general meeting today, after activist investor Oasis Management called on fellow investors to vote against the chief executive’s re-relction.
Ahead of the meeting, Darby is undertsood to have said ‘nothing is off the table’ when it comes to ensuring the turnaround of the business is completed, including a sale of parts of the business.
At the meeting today, 41 per cent voted against Darby’s re-election, but the under fire chief executive has vowed to stay on at the company.
Under fire: Gavin Darby is facing a potential shareholder rebellion at the group’s AGM today
Fifty-nine per cent of the group’s investors voted in favour of Darby’s re-election.
Premier Foods’ 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.’
Speaking before the AGM, Darby said the public row might help Premier Foods find potential buyers for some of its brands, which include Angel Delight and Bisto.
Oasis Management is Premier Foods’ second biggest shareholder and has recently upped its stake in the group, while US hedge fund Paulson & Co has also piled on the pressure by increasing its stake from 1.99 per cent to 6.08 per cent.
Shares in Premier Foods are down 3.42 per cent or 1.6p to 45.25p.
Premier Foods’ executive team have come under heavy criticism from investors after fending off a takeover bid from US firm McCormick in 2016, while also recently opting not to sell off its fast-growing Batchelors brand.
Instead of tying up with McCormick in 2016, Premier announced a collaboration agreement with Japan’s Nissin, which also took a non-executive position on Premier’s board. Nissin also became the group’s biggest shareholder with a 23 per cent, but, unlike Oasis Management, it backs Darby.
In a trading update for the 13 weeks to 30 June published today, Darby said: ‘We are pleased to report another quarter of growth, with sales up +1.7% compared to last year.
Falling: Shares in Premier Foods are down 3.42 per cent or 1.60p to 45.25p
‘Our biggest brand, Mr Kipling, led the charge with an excellent performance on the back of its recent brand relaunch with sales up 14 per cent in the UK.
‘Over the last six months, we have delivered sales growth of 4.5 per cent which goes to show that our strategy of product innovation and working closely with our strategic partnerships is delivering results.
‘With further exciting innovation across our branded portfolio to come in the months ahead, our expectations for progress in the year remain unchanged.
The group’s branded products saw sales rise 1.1 per cent in the quarter, but non-branded sales jumped 4.8 per cent.
Paul Hickman, an analyst at Edison Investment Research said: ‘Premier’s first quarter trading statement shows total solid sales growth of 1.7%, lower than 3.6% for the year ended March but still positive both on branded (+1.1%) and unbranded products (+4.8%).
‘Management has covered the position by saying that progress on its key priorities should be weighted to the second half.
‘The other main legs of strategy – the cost and efficiency programme and the debt reduction initiative are a work in progress, but both look to be on course.’
Boost: The popularity of Mr Kipling products helped Premier Foods’ UK sales rise 14% in the quarter