Premier Foods plc

Morning, everybody. So, morning, and thank you for joining this, which is our quarter one trading update call that covers the 13 weeks to the 1st of July this year. I'm joined on the call this morning, as always, by Duncan Reget, our CFO. And I'll start by giving a few headlines on our trading in the quarter, and then I'll dive into a few key areas that provide a bit more detail, and before, as usual, passing to you for your questions. Now, also as a reminder, we're today holding our HLM. That's at 11 o'clock. And that's to tell us here that our office is in St Albans and we're an option of attending virtually just like we did last year. So if there are any shareholders who'd like to attend and don't yet have the details, please do contact Richard Godden in Investor Relations for details of how to attend. So on to the course one results then and overall I'm very pleased to say that we've had a strong start to the year and reported sales growth of 21.1% and branded growth of 17.5% this morning for our first quarter. And that's a result we're clearly very pleased with. In addition to this, we've also grown our market share and integrated business by another 94 basis points. and given the current environment, the results today are partly due to the strength of our brands, of course, and their relevance in the current economic environment, but also very importantly down to continuing to drive our brand and growth model and delivering against our five pillar growth strategy, but more of that shortly. In terms of strategic progress in our new category, we've more than doubled our sales of Ambrosia Porridge, and also actually of Kate Perkins and Spice. And our overseas business has made great progress, in particular with Mr. Kippering, both in the US and in Australia. So with a very positive start and with strong plans for the rest of the year, we're now saying we expect to deliver trading profit at the top end of market expectations. So we'll go through a brief review of progress in the quarter, but before I do, I just want to remind you of our brand's growth model, which is at the core of what we do and is the reason why we've been able to deliver such consistent, strong performance over the last five years or so. So we start with a portfolio of brands which are leaders in their categories and have got very high household penetration. This, of course, is a great starting point, but on its own doesn't give you growth. So we then rip and re-impair so we can work closely with our consumers so that we can bring to market insightful new products and which are based on what we've understood on consumer needs and trends. And then we support our brands with a mostly engaging and meaningful marketing and TV campaign. And then finally, but also very importantly, we work closely with our key retail partners, delivering excellent info execution and visibility for our brands. So to finish the grocery business, then a very broad-based and strong performance all round, and a similar pattern to that actually that we reported in quarter for last year. So total grocery sales were up by 26.7% and all our major brands delivered double-digit growth, so contributing to the 25.1% branded sales growth in the quarter. And really there aren't any brands which I would really call out as notably stronger than the others or in fact delay part within that. There was of course fair amount of price included in that very strong revenue growth. Separately and importantly, I'd point out that our portfolio is generally well positioned and highly relevant during the sort of challenging economic environment which we're facing at the moment, and I'll come back to that thought a little later. One important and very encouraging trend I'm pleased to highlight is that we saw an improving volume shape towards the end of the quarter across our brands, which, as I say, we're very encouraged by, and we'll be tracking this very closely in the coming weeks. As is always the case, the way we build volume sustainably over the medium term is through our branded growth model, and especially our new product development program. And the cause and benefit is from product ranges such as new improved versions of, let's say, stock pots, a big size version of our very popular, say, the noodle pots, a premium take on our bachelor's fashion sauce, which we call Chef's Specials, And then from Fantastic, expanding into two new categories with three new cancer sources and also something we call Protein Pops, all of which has been launched over the last year actually. Now I mentioned this briefly earlier, I'm pleased to say that as we've done over recent years, we've continued to take market share in our grocery business. And you may recall that we gained share during the last financial year for 64 basis points over the year. And this increased by the 90 basis points in the fourth quarter. Well, we've continued this momentum into the first quarter of this year, taking up to the 94 basis points per share. And I think it demonstrates that our brands continue to be very relevant and important for our consumers and also demonstrates their strong competitive positioning. Now, the topic of inflation has been very much debated over the last 12 months or so, and as I've previously outlined, we've obviously not been alone in experiencing significant import cost inflation across a range of commodities, energy, and also labour costs. And we monitor our commodity costs very closely, and as I've mentioned before, we've looked to offset this unusually high level of import cost inflation by using a range of measures, and these include how we manage our supply contracts, to minimise the impact of value input costs in the first place, along with our heading strategy, and then a significant focus on cost staging and efficiency programmes before finally price increases where we need to. You may recall that when we last spoke in May that we recovered all the input cost inflation that we've seen to date and that very much continues to be the case and we will of course continue to monitor the situation very closely but we now believe the significant levels of inflation which we've experienced over the last 12 to 18 months have now passed this peak and therefore we have no further price increases planned for the remainder of the calendar year. That In the current climate, there are clearly some consumers who are unfortunately needing to make tough choices when it comes to their grocery shopping. And one thing we continue to see is that more people are cooking for themselves and their families at home. And this, of course, makes a lot of sense. We all agree. And without doubt, the cheapest way to do this is to cook for yourself at home. And as you know, we have a broad portfolio of brands which resonates strongly with consumers and many of our product ranges. are therefore well-positioned to help consumers create those tasty and affordable meals in a convenient way. And actually one thing people tell us is they struggle for ideas for meals that they can create at home. So a great example of how we're helping provide families with the inspiration to prepare affordable, nutritious meals at home is through our Best Restaurant in Town campaign, with delicious meal ideas demonstrated in short videos. And we started this last year as a digital campaign with YouTube videos, but it proved to be so successful that we've now significantly upweighted the campaign, and with many of our recipe ideas also now being added on mainstream TV, so building on the successful YouTube campaign that we ran in the last five years. And then with three treats, Mr. Kipling has served the growth in the quarter with sales up by 3.6%, and this is really down to us continuing to work our brand and growth model Mr Kipling benefited from the impact of new product development, and examples of this include our indulgent signature brownie bites, which I have to say are particularly delicious, and the non-HFFS, the non-high-fat salt and sugar, deliciously good range of cake slices and fruit pies. And additionally, the King's Coronation in early May was celebrated on the packs of some of our most popular Mr. Kipling products with associated impactful displays in store, and that boosted sales in the quarter. Just for completeness, happy sales were a little lower following the slightly earlier timing of Easter this year compared to last year. Now, of course, another important element of the brandless growth model is investing behind our brands, including in marketing and advertising campaigns. And in the first quarter, we again advertised Mr. Kipling, our largest brand on TV, with the popular piano advert, as we call it, which captured the nostalgic moment between the father and daughter. And this is important because I think it's a great example of the kind of emotionally engaging approach that we're employing to build long-term emotional connections between our brands and our consumers. And this year, again, we planned to land the site six of our major brands using a variety of media, which we did in all posters and TV. And we will again increase our overall brand investment compared to last year. Our non-branded sales were also well up on previous years in groceries. Sales were up by 38% to £22 million, which was largely down to higher pricing compared to the same quarter last year. And the three tweets on branded sales were also much higher. quarter one this year and this is down to some further contract wins in pies and parts and then of course as you would expect there's some pricing benefit in there as well. Again as we've mentioned previously over the last few quarters we're not seeing a huge effect of consumers trading down from our branded product ranges to private label and I think one way you can see the evidence of that is in the continued increases in market share. So if we move on to our other strategic growth pillars, I'm sure you'll recall that one of these pillars is to deliver growth in overseas markets. And as I've said before, this will be in the key target markets of Ireland, Australia, New Zealand, North America, and Europe. And within these target markets, we're focused on Mr. Kissing, on Sharwood, and of course now also on the Spice Taylor. And that's other than Ireland, which is a more established business that carries a broader portfolio of our brands. Our international business has performed very well again for us over the first quarter, sales increasing by 14% on a constant currency basis, including the Spice Taylor. And as I just mentioned, Mr. Kipling is one of our brands which we see as having some true global potential. And as we said back in May, we've completed a successful trial in the US in 220 stores at the retailer Target. and we achieved some really encouraging results there with strong rates of sale. And so off the back of this, we've started to roll out for further customers. And so far, we've agreed distribution in 1,400 stores across a number of retailers in the U.S., including in Albertson Safeway, which is, of course, a major player in the space. Additionally, we're expanding the product range so it includes strawberries and cream slices for the summer, and they're in target right now, and then some seasonal limes planned for Halloween and the autumn. In Australia, another one of our key target markets, our in-market performance of cake has continued the positive momentum that we achieved last year, with market share now at 17.6%, that's another market share record. We've also reached 20% household penetration, which is two percentage points higher than the same period a year ago. The share of Mr. Kipling in Australia is now of sufficient size to support mainstream advertising, including TV, as we start to focus now on building brand equity, just as we do in the UK and Ireland. And together with new product launches, such as the same Mr. Kipling signature brownie bar, the rollout of our proven branded growth model from the UK is now in full swing in Australia. And in Europe, another one of our target markets, we've expanded distribution of Charlotte in both Germany and the Netherlands in the course, which has helped drive total European sales up by over 30%. And that's all part of the European expansion plan that we've got for Charlotte. Another of our strategic growth pillars is taking the brand building capabilities that we've demonstrated in our core categories, where we've got strong leadership positions, and expanding into new categories in the UK. One of the early successes is Ambrosia porridge pots, which, as a reminder, is a convenient and ready-to-eat range of breakfast porridge. And these are, as I say, ready-to-eat, so they're not the dry product. They're made with creamy West Country milk, which, of course, you'd expect from Ambrosia. We're very pleased, indeed, with the progress we're making with this range. We've built critical mass now in breakfast, with Q1 sales more than doubling versus last year, and our market share continuing to build. Additionally, Cape Heron Spice, the southern style spices range, also increased sales by over 100% in the quarter, benefiting from increased raising and distribution, and also a strong barbecue season in June, given the hot weather. And then just as a reminder, our final strategic growth pillar is to look for inorganic opportunities, which we can bring into Premier and then deliver further growth by leveraging the strength of our branded growth model. And that was one of the key principles we applied when we assessed the fit of the Spice Tailor. And I'm pleased to say that the Spice Tailor is on track and is actually expected to be slightly ahead of our original acquisition model this year. We're securing expanded distribution both in the UK and overseas and also working on a number of major new product initiatives which will start to come to market over the next couple of years. Now, we continue to explore further in organic opportunities. However, we are quite picky, and we'll update you when we have anything more that we can share on that. So, if we now look ahead to the rest of the year, a couple of things to note. So, firstly, we expect to see our grocery revenue growth moderate as we progress through the next course of the year, and that's the effect of year-long year price increases that we see. And then for retreats, this will have a slightly different dynamic, which we expect to see a strengthening trend in the second half of the year. So I think that's how to think broadly about the revenue trend for the remainder of the year. So to summarise where we are, we had a really good start to the year. The sponsor, of course, continued that very positive momentum from the end of last year, and we continue to drive our proven brand of growth model, and our portfolio continues to demonstrate its relevance in this challenging environment. And another result And, of course, we continue to take market share. As we look forward to the rest of the year, we will, of course, bring further new products to market. We'll be increasing our brand investment as well as expanding our UK presence in new categories and continuing to build our overseas businesses. And so with this strong first quarter behind us and some great plans for our brands for the rest of the year, we now expect to deliver plenty of profit at the top end of market expectations. So thank you for your time. I'll now pass back to the operator and we'd be very happy to take any questions. Thank you.

Thank you. We will now enter our Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you change your mind and would like to revoke your question, please press star followed by two on your telephone keypad. When getting ready to ask your question, please make sure that your device is unmuted locally. We'll now take our first question from Charles Hall from Hill Hunt. Charles, your line is now open. Please go ahead.

Well done on an excellent quarter. Could you just talk a little bit about the impact of the weather during the quarter? Because obviously it was pretty hot during the period. What did you see in terms of trends in volumes and the mention that they were picking up towards the end of the quarter? Is that just because the weather started to normalise? Or is that because with pricing now embedded, there's more promotional activity or potentially just use of the pricing levels?

Well, Charles, thank you. So, Kenny, you're absolutely right. We had a blitzing hot start to the summer, didn't we? And you'll be aware, most people will be aware, that a fair chunk of our grocery portfolio is quite weather-sensitive. So I think that did pin us back in the middle of the quarter and if it hadn't been for that we'd have probably delivered even stronger results than we have actually. In terms of volume trends, what we were really referring to wasn't really linked to the weather. It was more a case of as we got towards the back end of the quarter, we started to see the trends that we saw after. Remember, we increased our prices in the summer last year, and obviously you get the price elasticity impact of that. And then gradually we saw volumes coming back to get almost back to flat. And I think what we're seeing is the same trends based on the price increases that we put through at the beginning of the year, we're now getting to that point where the volumes have started to get back to fairly flattish, so I'm pleased with that trend.

Okay, understood. And then secondly, on the international side in the US, obviously really good progress in terms of distribution of Mr. Kipling. Can you just give a feel for the timing of products going into store? And any feel about the number of products per store, the number of SKUs and you also talked about some seasonal products going in. What's the timing of shipment of those? Is that sort of looking towards the Christmas period or any other seasonal products that you've got going in?

Good question. So A number of those, I don't know the exact number, but a number of those 1,400 stores have already got products, you know, live on sale. And, of course, that includes the Target, every little Target store. And some of them are going to come on stream as we go through the rest of summer. we've got a range of three flavors of the core range and most customers seem to be taking the range of three which I think is a good start point a good core range to have in but as you probably will be aware in the States the impact of seasonal events is huge And so having a seasonal offering is going to be a really important part going forward. So starting to gear up for that, starting with, you know, this fall and having, you know, the right sort of... and Halloween-type products available. And then as we go through into next calendar year, we'll have available an entire seasonal sort of calendar whereby we transition from spring SKUs into summer SKUs into autumn SKUs that are important to gain that extra feature space and support in the sense

And just lastly, can you just update where you've got to in Canada in terms of Mr Kipling, just to give a sort of feel for how North America might progress?

Yes, so obviously it's a much smaller market. We arrived at a very similar place with the test we did there that we then replicated in the States. And since then, we've been gradually increasing store counts. So it's sort of a similar situation to the U.S., really, except I think what's happening is the focus we're putting on the U.S. is delivering a faster rollout, and that's quite intentional given the opportunity size. Got it.

That's great. Thanks.

Thanks, Rob. Thank you. Our next question comes from Matthew Webb from Investix. Matthew, the line is now open. Please go ahead.

Thanks very much. Morning, everyone. Three questions, please. First, you talked about the relevance of your product in the current environment. Do you think that consumers are becoming more and more cost-conscious of the cost-of-living crisis? Are there any signs of that changing at all as some prices come down and others stabilize? That's the first question. Second question, you said you're not planning any further price increases this year. Do you think you'll be able to hang on to the price increases that you've taken? And then the third question, you flagged that you're still on the lookout for inorganic opportunities. I mean, is there much out there where, through price expectations, are they realistic? Anything more you can add on that would be very helpful. Thank you.

Thanks, Matthew. So he's taking those in order. So, yeah, I think, you know, one of the things we've definitely seen is that, you know, as some consumers have had to make some sort of choices on how they're spending their available, you know, cash, you know, we are benefiting from people using our homework. And that's quite clear in our data. And I think having leading brands is very helpful in that sense. And probably also the fact that we've got such a vibrant new product development program. So we've always got sort of related flavors and related formats, which is very helpful. It's interesting. I've not seen any... as you put it, any increased level of consumer price sensitivity, you know, if anything. I think what happens is that over time, volumes come back, which seems to suggest people get used to new levels of pricing. But at the same time, we need to overlay on top of that that we're working very hard to make sure we've got great activation in store, we've got great promotional activity, and that we're continuing to drive our dynamic growth model very hard. So it's rather difficult to tease out the different elements of that because obviously we've got our foot flat to the floor on driving that. price elasticity. Moving on to your next question. So, yes, no further price increases based on what we can see in terms of what's happening to commodity pricing. As I said, I think the import cost inflation is past its peak, but let's not confuse that with price deflation. So, yes, one or two ingredients have started to go down, but some are still on the way up. And I think if we extrapolate forward what we can see, I think most commentators in the same place, I think we'll still be seeing true inflation as we get to the back end of the year, just not as acute as it has been. So I'm not anticipating that that is going to lead to decreased pricing on our kinds of products. If we did and we did get the opportunity, of course, we'd want to be competitive and And therefore, we would look at our professional pricing, but I'm not necessarily sure that that's going to be the way that things play out. And then, sorry, Matt, just remind me of your first question. Just any more colour on the inorganic. Yeah, I mean, I think this fresh thing is not a lot out there. You're probably well aware of that. And the things that we are looking at, I've said... before, we are incredibly picky. You know, we... took a while to find the spice tailor we were looking for something that we were absolutely convinced that would benefit dramatically from us applying our brand and growth model that we could bring something new to the party which would dramatically accelerate the brand and that very much remains the case in terms of what we're looking for so we're not going to buy the first thing we come across we're very choosy so it will take a little time Super, thanks very much

Thank you. Our next question comes from Andrew Wade from Jefferies. Andrew, your line is now open. Please go ahead.

Morning. A couple of questions for me. The first one, we're sort of in the midst of annualising the price increase, summer price increase, sort of at the moment. My understanding was it was towards the back end of June and into July. I guess that does tie in with your comment on the volume trend. Just wanted to see if you could give us any colour on... whether it sort of performed in line with how you'd have expected it to as you've analysed those price increases. So that was the first one. And then the second one, you talked about the Easter impact on Cadbury, just wondering if we could, in Sweet Troops, just wondering if we could get an idea of the scale of that impact and more broadly, I suppose, why the branded Sweet Troops is running... continuing to run sort of below branded grocery. Now, obviously, it's partly because branded grocery is doing so well, but just any colour on that you can give would be helpful. Thank you.

Yeah, more than I'd be sure. Yeah, so if you think about pricing, you know, and the impact year on year. Obviously, we've got those two big steps where we put our pricing up in the year-ago best, so it's just mathematical. Obviously, the anniversary they didn't go over them will be a decreasing element of pricing in the growth rate, so that's just a mathematical consequence. We've not hit that point yet, so I expect that to play out as you would expect from the maths, really, rather than anything else. What I think is possibly more interesting is when you start to think about price elasticity. And I think this sort of starts playing into your first question about why is Brandon Street treats behind Brandon Gracie. And you're right, it's because Brandon Gracie is doing so well. But then the interesting question is why is Brandon Gracie doing so well? And I think what's happened overall is, you know, we went into this environment and our price increases with, armed with a whole load of analytical tools that we've done around price elasticities across all our brand ranges. And things have played out a little different than we expected. In fact, they've played out quite a bit better than we expected. So we have seen less price elasticity on our grocery business than we anticipated. And I think that's one of the reasons why you see such strong performance from than we thought we would. Now, part of that, I have to say, is because of the things we've done to make sure that that's the case, and that's about driving the brand and growth model, and particularly that really strong indoor execution. But the overall lower level of price elasticity is biased towards grocery. And actually, 3T has turned out to be slightly more price elastic than we expected. So you've got this situation where overall our performance is better than we thought it would be because of this impact. But it's manifested itself as quite a lot better on grocery and a bit worse on 3T. So I know that helps with that.

Yes, that's very helpful. I'm killed two days with one stone, so great. Thank you.

Thank you. Our next question comes from Clive Black from Shore Capital. Clive, your line is now open. Please go ahead.

Thanks, Clive. Thanks for the presentation, Alex, and well done to you and the team. Two from me. Firstly, just interested as to whether there is strategic significance to what you said about applying a branded growth model to Australia. And secondly, in years gone by, Premier used to talk about putting the full oomph of marketing around five or six brands. I just wonder how you would characterise the brand portfolio now in receiving that full branded post-model treatment.

Thank you. Thanks for that. So, yeah, I do think there's truly significance around applying the brandless growth model in Australia. So, you know, obviously when you, when we take our brands into new markets, so Mr. Kippen into Australia is a great example, you know, nobody's heard of the brand, have they? So, they're bunched because, you know, they come across it in the store, we're promoting it and trying to get people to try it for the first time. Hopefully they like it and maybe keep purchasing and you start to build some volume. But then, Reaching that tipping point where you can then say, I've got a core range that's big enough, growing fast enough, it's been bought by enough people that I can start to put on top of that the MPD pipelines from the UK. I can start to support that with media. I'm turning from selling good products into building brand equity and building the strong brand. It's a really important tipping point mentally for me. And the reason why it's so strategically significant is this is about us building businesses in other markets. You know, our aspiration here is to build, you know, a replica of our UK business in a number of markets over time. And I think this is just a... It's an early stage, but it's a really important indicator for me. So I think you're right on the strategic significance of it, Clive.

Yeah, so... Sorry, Alex, just by way of follow through, it's going to take some time for Mr. Clipping to fully appreciate the resources behind Premier, but over what period of time would you expect more brands and more geographies to be experiencing that going from a selling model to a branded growth model?

Yeah, I think Australia were at that point really, you know, clearly on cake. And we had a really strong position on Indian cooking sources as well, where we're the leader there now. We look at shots and the spice tailor. And when you look to North America, you know, we're at a much earlier stage. As you know, with the building distribution phase, I don't have a specific date on when we expect them to be able to turn on mainstream media support. But we're certainly looking at how we support digitally because we can do that in a more targeted and cost-effective way. And then we're starting to plan what... what regional support would look like if we get ourselves into a position where we've got a sufficient critical mass in geographical pockets, if you like, within the sector. Obviously, it's an enormous market. So, you know, all processes are going on, but there's a bit of road to go down first, I think. No, fabulous. Thank you. And your second question, Clyde, you know, I think in the past, yeah, probably we did talk about having focused brands. I've never been a big believer in it. My experience has always been that if you If you go down the road of saying, I'm going to have some special brands that get all the focus, what the organisation hears is, don't do anything on the other brands. And so, in my view, if you want to have a successful business, you need to actually do everything forward. Now, obviously, they don't get the same allocation of resources. So, your mainstream TV support is something that goes to the bigger brands and the bigger P&Ls and with a bigger outside opportunity. But if I look at things like the MPD programme, You know, we expect that there's an MPD pipeline on all the brands. So it's my kind of example I've used before, Clive, is, you know, there is an MPD program on Angel Delight, and it's been incredibly successful. And the main angels are, you know, 50% or so bigger than it was a few years ago. So we move everything forward, but the resource allocation obviously gravitates towards the bigger brands.

That's really helpful context, noting that you mentioned the cake oven spice in your statement. So that's a really good perspective. Thank you. Thanks a lot.

Thank you. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. Our next question comes from Ning Yang from Jupiter Asset Management. Ning, your line is now open.

Please go ahead. Thank you. First, congratulations on a very strong quarter. I have three questions. Firstly, on the cost side, obviously we have seen a lot of political pressure on the big four supermarkets to reduce prices. Do you feel that kind of pressure that's been passing on to the food producers in your field And also, do you feel the recent event in Russia and Ukraine, you know, given now the grain price, sorry, the wheat price and the corn price has kind of increased very significantly, do you feel that will have an impact on your margins? And the second question is, Do you have flexibility to switch between your branded products and the private label products in case of, you know, changing in the kind of consumer preferences and behavior when, you know, when the cost of living squeeze is passed? And the third question is, is do you maintain your capital expenditure and the restructuring guidance unchanged as provided in your Q4 update? Thank you very much.

Sure, yes, thank you for that. So on cost, yes, I mean, we've observed, you know, the political pressure on the supermarkets, as you call it. You know, I think probably the most important thing to understand here is We have passed on less costs in our pricing than we have experienced in terms of our imports and the difference between the two, given that obviously when we last recorded margining Q4 our margins were flat and the difference between the two is obviously our internal cost saving programme. So we continue to work really hard on those and that has meant that we have passed on less pricing to the consumer. specific pressure on us as you mentioned with the supermarkets and I think we'd be very clear on that point is that actually we've helped consumers here as best we possibly can by limiting the amount of price that we've passed on to them. In terms of week price, I love the I think we're still quite clearly able to stand behind the same what we've made before which is that we've recovered all the pricing that we need for the rest of this year and I don't see that the recent events in Ukraine actually have any significant impact on the overall picture from our portfolio. Your second question was about flexibility between private brand and private label. The simple answer to the question is yes. But the actual real point for me here is that our job is to build brands. We're brand builders. That's what we do. That's what we're good at. That's how we've managed to grow the business so effectively and consistently over the last four or five years. And therefore, it is really about us making sure that we've always got the right offering for the consumer at the right price with the right new products. and therefore to make sure that they stay in our brand and you can see from the market share gains that we're getting that we've been successfully able to do that and that will continue to be the focus of our strategy. And so I think, Duncan, you're probably back to place to answer question three. Yeah, sure. Hi, thanks for asking that. I mean, yeah, typically we give, you know, we give up native CAD guidance at year end and at half year. You know, you can probably assume that we haven't, we haven't got the need to say anything for quarter one, that what we say a few months ago is still down. And of course, we'll update and just give updates, guidance on all the, all the cash moving past the part of the half year when we get to November.

And that's good. Thank you. Thank you very much.

Thank you. Our next question comes from Damian McNeill from Unis. Damian, your line is now open. Please go ahead.

Hi, morning, everybody. Just two hopefully pretty quick ones from me. Firstly, on the Spice Tailor, I think Alex, you talked about it performing better than your initial expectations. I was just wondering whether you could give us a little bit more colour on that. what was driving that outperformance versus your initial view and maybe even how much it contributed in the quarter to overall branded sales. And then just one quick one. On the non-branded Sweet Treat contract wins, just to clarify, are they annual contract wins or is there anything we should know about those when thinking about putting them in the model? Thank you.

Good morning, Damon. Yeah, so SpiceTailor, when we bought it, we were very much of the belief that, as I say, our branded growth model, as I say, would deliver disproportionate growth. The intent very much being to make the brand, I think I used the word several times the size it was when we bought it, and that's very much what's baked into our acquisition model. We're at the first phase of that, which is really about plugging gaps in distribution because the product sells faster than the amount of distribution it's got would suggest, if that makes sense. So it deserves more distribution in more stores with more products than it actually has. And obviously, compared to the 3D failures, we've got a pretty big sales team, which are backed up by quite sophisticated analytics. So our ability to deliver that but it's got that side where it's going to perform better in our hands, I think. So what we're seeing at the moment is that actually we are getting all that distribution as we expected and probably more. So we've got increased distribution in the key retailers in the UK, bigger product range, more SKUs and also more stores, and that's all sort of coming on stream. We've seen significant increases in distribution as we've rolled out in Ireland. So I think the brand was only in Tesco in Ireland, and that was really by virtue of Tesco UK. And we've now got it into Duns and Thief Valley, so that comes on screen later in the summer. We've got distribution in Walmart in Canada. We've got distribution now in New Zealand. And we're working quite hard on how we get the brand into the US. And we've applied for that approval, so wait for that to come through, and also into a couple of lead markets in Europe. And when I look at that, and I also look at the activation we're able to do, the promotional activity we're able to do in store, and extrapolate that out of the full year, I think we're going to be in a position that's kind of ahead of our internal acquisition level, which I appreciate you've not seen. But nevertheless, it gives us great confidence to know that things are tracking better than we expected. And then my other point was, you know, we're quite excited about the new product development initial work that we're seeing from the marketing and R&D team. So those products haven't come to market for a while yet, but there's some really quite exciting expansion plans, which I think will have a lot of value as well. So, you know, overall tracking, you know, at least on track, if not rather better, let's say. And then I think your second question was about what did it contribute to in the quarter? Yeah, annual contracts and receipts. So I don't know off the top of my head. Richard, do you know what... Yeah, I mean, we've got different... Yeah, we've got more contracts on... We saw that we wanted some contact through last year. There's actually more contacts that we've done that we'll carry. We generally expect to agree them sort of annually, and they're already expected to carry through for the bulk of the year. You can see in the quarter, probably about half of the number, and it goes with volume of contact here, and then the rest of us with more clients.

Okay, brilliant. Thank you, Duncan. Thank you, Alex. Very clear. Thank you.

As a final reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. Our next question comes from Darren Shirley from Shaw Capital. Darren, your line is now open. Please go ahead.

Yes, more than all, just sort of one and a half from me, if you don't mind. You've mentioned the importance of sort of in-store activations, your share gains in the UK market. I mean, is this being achieved across the board? I mean, is this with specific retailers where you're working particularly well? I'm not looking for you to name names. I'm just wondering whether you think there's a further upside in that as that broadens out maybe across categories or across retailers?

Well, I think if you look at the brand growth model, working closely with retailers in specific partnerships and therefore being able to drive great visibility for the brands, including through in-store activation, has always been a critical part of the model. I think the way we've looked at it over the last 12 months and continue to look at it through this year is given the impact of pricing from volumes and the price elasticity, what we've done is we've sort of doubled down on the importance of that in store activation. And one of the things we've been doing, and I think I've talked a little bit about this in the four-year results, actually, is we've been trying to find really big, impactful projects tie-ups with third parties. So, for example, we've done some work with the Minions franchise and we did some great executions with one of the key retailers whereby we teamed up with the Minions movie franchise and people could win tickets and things and that was featured on our packs. And that was only available in one retailer. In exchange, in that one retailer, we were therefore able to build, you know, quite big and dramatic displays with cardboard cutouts of millions and things. And that sort of in-store theatre, as we might call it, you know, we know is incredibly impactful in terms of driving volume. So what we've been doing is we've been, you know, increasing our investment in those big in-store events and using that to offset the impact of price elasticity.

Okay, and so that's what we should expect to be a feature of your brand going forward then in terms of the success you've seen?

Yeah, very much so. It's been incredibly successful and so, you know, as we've sort of seen that, we've basically done more of it and we've put more funding towards it within across a broader range of brands and in more sorts.

Okay. And then just a I suppose I said it was half a question, but I mean, there's been a lot of talk around international, but Jordan, you talked about applying the European growth model to Charlotte. I mean, how would that differentiate, be different than what we're seeing in Australia, et cetera, with Mr. Kipling? Or is there any much difference?

Yes, as you know, what I was saying on Charles is that it's actually a rollout plan we've got. So, obviously, Europe is not one place. It's lots of countries and lots of retailers. And we work across Europe with a series of distributors. And our plan is to keep rolling out. into more and more countries. So what we've seen today in Germany, for example, over the first quarter has been an expansion of distribution, which is very much just part of that rollout plan.

Okay, so it's target and broadening Europe as opposed to specific retailers and countries?

Yeah, we're sort of going country at a time into more and more. Obviously, it's very different to your comparison with Australia. Australia, one country, two big retailers. You look at Europe, lots of countries, I believe password-acquired retailers, so it's clearly also a longer and slower process.

Okay, thanks for that, and well done. It was nice to hear you. Thanks, Doug.

I guess there are no further questions in the line, so we'll now hand back to our host, Alex, for any closing comments.

Thanks, everybody, for joining in this morning. To summarise for me, look, I think we're feeling pretty confident. We've had a really good start to the year. We've got a lot of really quite exciting plans, actually, for the rest of the year as well, so I'm feeling pretty good, and hence why we've decided to probably be at the top end of