Premier Foods plc

And welcome to this year's full year results announcement. That's for the year that ended on the 30th of March this year. So same format as always. I'll just give us a bit of an overview of how we've been doing. Then Duncan will take us through the numbers and I'll come back and take us through progress against the five pillars of our five pillar growth strategy. So to kick off, look, I'm really pleased to say that we've had a super year. So turnover was up 15.1% at 1.123 billion. And then in our UK business, we continued to take market share. So 29 basis points of share gain during the year. Trading profit, ahead of expectations, up 14%, so broadly in line with revenue growth, and adjusted PBT at £158 million, exactly in line with revenue growth. Adjusted EPS, that's up 6.4%, and that's obviously taking into account the new higher rates of taxation. And then I think really interesting is net debt to EBITDA is now down to 1.2 times. That is our lowest ever leverage, and is, of course, now below our 1.5 times target. So given the strength of performance in cash generation, the Board are proposing a 20% increase in the dividend. That's obviously three times EPS growth. And then just as a bit of a reminder, of course, we already announced the suspension of those pension deficit payments, and Duncan will talk about that in a little while. But that does save us £33 million of cash in the current financial year. And then the other thing that I'll come back to later is that what we also saw in the fourth quarter of the year, exactly as we expected, we saw a transition from value-led growth into volume-led growth. So we sort of came out of the quarter with some volume growth, which casts forward into this year. So as well as that strong financial performance, we've made progress on all five pillars of the growth strategy. And I'll come back to this in more detail later, but just quickly to walk through them. So UK branded revenue growth was up 13.6%, so very healthy indeed. We invested 33 million back into our manufacturing operations, and that obviously makes us more efficient, improves margins, and helps us manufacture the new products we bring to market. Our new category expansions are going really well indeed. So we had 72% growth from those new categories. And then the international business grew double digit again, so up 12% of constant currency. And then the fifth pillar, the inorganic opportunities, During the year, we continued to grow the Spicetailer. Again, I'll talk about that in more detail later. But we also acquired Fuel 10K. So you can see good progress, I think, across all of the five pillars. Now, the other thing I just wanted to do was just put the numbers in a bit of context of the journey we've been on over the last five or six years. And if you start over on the top left there, that's a pretty... um consistent uh strong top line growth you've got that bit of a peak from the pandemic of course in the middle but that's a 6.4 percent uh kager revenue growth and then if you look at trading profit Over the same period, again, a nice strong trajectory and trading profit actually going just slightly ahead of revenue growth at 6.9% on a five-year CAGR basis. Adjusted PBT is even stronger, of course, 12.3% five-year CAGR, and that's because it benefits from the reduction in interest that we pay, and that's because we've obviously got a lot less debt than we had in 2018-19, and that debt was refinanced at a much better rate. Which I suppose brings me on to net debt, which has fallen from 3.2 times net debt to EBITDA down to that 1.16 that we're reporting today. So it's not just one year of good performance. There's a nice sort of track record there as well. And we've also continued to make good progress against our enriching life plans. These are ESG targets. There'll be a lot more detail on this in the annual report in a couple of weeks or so because it's quite a big topic. But just to pull out a few of the highlights, remember we have three pillars, product, planet and people. On the product side, we've been working really hard to make our portfolio healthier. And I'm pleased to say now that 44% of the products in our range have an additional health benefit. So that might be, it's one of your five a day, or it might be that it's got fibre in it or something like that, as well as being of higher nutritional standard. And higher nutritional standard means less than four on the government nutrient profiling model, i.e. it's not classified as HFSS. And you can see that that 19% statistic at the bottom is saying that those healthier products are growing faster than our core, so they're becoming a bigger part of the... bigger part of the portfolio, and that's partly due to growth, but it's also because we're reworking the recipes on some of our product ranges and also the things we bring to market. We're working really hard to make sure that they start off in a good place in the first place. On the planet pillar, a 14% reduction on our scope one and two emissions. That actually now brings us slightly ahead of our trajectory towards our 2030 targets and net zero. And one of the things we've started to do now is to put solar panels onto the roofs of our factories, because obviously they're quite big footprints, and you can get quite a lot of solar panels on them. So we've done that first at our Stoke bakery, and that's up and running. And we're working on other factories that we can do that on when we get the right permissions and things through. As a reminder, on the people pillar, we now have 46% of our management colleagues are female. And then our long-term charity partner, FairShare, we donated through FairShare almost a million meals to those in food poverty. So really good progress against the 2030 goals that we set ourselves. And with that, I'll hand over to Duncan. He can take us through the numbers.

Thanks, Alex. Good morning, everyone. So I'm going to spend the next few minutes talking through the financial summary of the 12 months ending March 2024. And as Alex said, it has been a good year. Total revenue up 15.1%. And again, the branded part of our business, which is the key growth driver, is up 13.5%. So that's really strong growth. I think good to see growth across both grocery and the sweet treats business. Non-branded revenue throughout the course of this year, we've seen increases, you know, reasonably strong increases, although it's a much smaller part of the business, through pricing, so recovering the input cost inflation we've seen across the non-branded business, and also some new contract benefits, particularly in sweet treats. So moving down to divisional contributions, so you can see margins moving forward. I mean, we do have, I guess, a financial strategy of moving forward our gross margins. How do we do that? We do that through supply chain efficiency. We can see the benefits of our capex, our increased capex in here. And obviously, we do that so we can fund investment in the brand. So you can see some cost savings going in there, moving margin forward, even after having spent a bit more consumer marketing. So that takes divisional contribution to 254 million. Griffin corporate costs are up 26%. That's for three reasons. So the first one is, you may remember, we had a fairly chunky credit, so the best part of £4 million in last year. That was a one-off insurance recovery. We've got inflation in there, as you'd probably expect. So that's both across people costs and also certain of our contracts. And again, you know, we are here to grow the business. We're here to invest in the business, to make things work better, automate things and make things more efficiently. I might have mentioned this before, but we've got an ongoing project to improve our factory supply chain planning system. So that's a really compelling payback project, actually. But we see the benefits elsewhere in the peer now. We just we see the chunk of costs sitting in group and corporate. So where does that leave us? So trading profit 180 million, that's up 14%. So you can see trading profit margins pretty much in line with prior year. Adjusted PBT is up even more strongly at 15.1%. And adjusted earnings per share. So we've got a reminder, we've got an increase in tax rates. So we use a notional rate of tax for our EPS. And you know, the corporation tax rate is 25% this year versus 19% last year. So adjusted EPS is up 6.4%. And as Alex has mentioned, really pleased to be proposing another 20% increase, which I think even by my maths, that's more than three times earnings to 1.728p. So Grocery is once again our sort of growth driver and growth engine. So you can see both total revenue and branded revenue up over 16.5%. I think really good to see all our major brands in growth. Alex will talk shortly about how a combination of new product development and expanding into new categories has helped Ambrosia become the group's fourth £100 million brand. Nishin continues to do well. We'll talk a bit about that shortly as well. But Nishin products growth of over 30% as well within these numbers. And obviously, this reflects the benefit of international business growth as well. Non-branded revenue, again, as I just touched upon, we've got price increases in there. Volumes from our Charma business are down in the year. And you may have seen that we announced the closure of that site, so a difficult decision to close the site. And we'll be exiting that during the first half of this year. Through divisional contributions, you can see margins pretty much in line with prior year, again, having moved toward margin and using that to up-weight our brand investment, which is what we're trying to do here. And then sweet treats. I guess sweet treats had a bit of a difficult year last year. We had some unscheduled maintenance at one of our Cadbury's production lines. And at the beginning of this year, we talked about inspecting an improvement in sweet treats performance and profitability, and also that being more weighted towards the second half of this year. You might remember at half one, branded sales were slightly down. I think here you can see branded sales for the year are up 4.2%. So H2 has been strong. I think branded revenue has been up just under 11%. And in the fourth quarter, up about 5%. So really good to see, I guess, the recovery playing out as we expected. Non-branded revenue, again, we've got contract wins in there and some pricing. Again, I think with non-branded revenue, both in sweet treats and in grocery, I'd expect we pretty much cycled through both the elements of pricing and also the cycling of when we won the contract. So I'd expect that to be a much sort of normal level going forward. And as you'd expect, the higher branded revenue, the more volumes going through the site and better manufacturing performance compared to last year, all leveraging through the P&L quite nicely. So you can see the original contribution is up nearly 25% and margins up about 130 basis points compared with prior year. Alex has mentioned we've reached our lowest ever leverage, which is great to see, at 1.2 times. Now, I guess, how have we got there? We started the year at 1 and 1 half times. Obviously, EBITDA and profit and turning that into cash has really helped. In terms of the other components, so working capital, we've invested a bit into working capital over the last couple of years. That's mainly due to higher values of stock because the ingredients and materials we're buying that go into that stock are obviously more expensive. We've seen that dissipate a bit during the year. So we've got an improved working capital performance year on year. And you can see from a guidance perspective, we're expecting that to normalise as we go into this year. So we're guiding to broadly neutral for working capital. CapEx, we'll touch on shortly about some examples of how we spent it during the year, but we've increased it from £20 million to £33 million. That's in line with guidance. And I think it just underpins, again, the level of opportunities we've got. And I think reflecting that, we're planning to spend between £40 million to £45 million this year. Pensions are 39 million. We know it's been a fairly significant use of our cash over many years, with a suspension, which I'll talk about shortly, coming through. We'll be limited to just paying admin costs and government levies next year, so that's going to be more like 5 to 6 million. And then we're structuring at 14 million. That's largely related to the cost of closure of our Knighton site that we've talked about. There's also some M&A fees in there as well. Again, we'll be much lower. We'll be much lower this year, around 5 million. Half of that is just a tail end of closing Nizen and getting out the site. And about half of that is related to the closure of our Charmwood site. So where does that leave us? So net debt of 236 million. That's nearly 40 million down year on year. And that's after having spent 30 million acquiring Fuel 10K. So I talked a bit about pensions and you can see here it's clearly, you know, it's been important that we've supported the pension scheme, but it has, you know, consumed sort of 40 million of cash over the last few years. We've talked about progress since the merger we did about four years ago and a couple of months ago that culminated in agreeing with the trustees to suspend pension contributions. So effectively the 33 million of cash that we were due to spend this year, we will be no longer putting into the scheme. Why is that? I think it really is just great continued performance. I think the trustees have done a fantastic job since they got their arms around all three of the big UK schemes in terms of managing risk, changing the investment strategy. So a combination of hedging and whilst driving decent asset returns. I think it really just shows the sort of strength that the pension schemes are in. That takes us to the valuation, which is end of next March. Obviously, I can't really sit here and predict exactly what's going to happen. But we need to see where we get to there. But I think sitting here today, based on what we know, we wouldn't expect contributions to restart at that date. And looking a bit further ahead, we still talked about full de-risking of the scheme. What do I mean by that? It's effectively making sure that we lock in the financial position of the scheme. It could be through a buy-in transaction. And we still think just over two years to get that done will be sensible. But I think the way I think about the scheme at the moment is we are already running very low levels of risk. We'll continue to reduce that further over the next 12 or 18 months. We've got a good investment strategy, and we're generating some returns, and we're not paying any cash into the scheme now. So actually, I view ourselves as pretty well progressed down that de-risking journey, even sitting here today. So clearly, without any pension contributions this year, we've got a bit more cash to put to work. And we've talked about before having no shortage of opportunities to invest in the business. We know we've got, whether it's automation, whether it's energy efficiency, whether it's line renewal, investing in our sites remains a great source and a home for high-returning capital projects. We know from an M&A perspective, we've done a couple of deals. Both are returning ahead of plan. Obviously, fuel 10K is early days, but progress has been good. And Spice Taylor is performing extremely well. Alex will talk a bit about, I guess, our overall approach and a reminder of that shortly. But, you know, we are fussy. We apply strict commercial and financial hurdles. That will very much continue to be the case. It may be that the M&A gets a bit bigger over time, but I think we need to wait and see. We could easily... easily do another bolt-on if we find one that we find appropriate. So I think very much a good opportunity there. I think really pleased. We've talked about paying a progressive dividend. I think really pleased to be announcing, proposing our third successive 20% increase today in line with what we said and we're saying here that we'll continue to grow ahead of earnings going forward. It's a leverage target. It won't escape you that we're actually below our leverage target sitting here today. And it may be that we go even further below it until we can find a use for some of the capital. I think the way to probably think about it is we will oscillate a bit below in line, a bit above, probably depending on the M&A opportunities that come along. But I'd still view as one and a half times as a good medium term target in terms of how we're thinking. Right, that's all for me. I will hand back to Alex. Thanks, Duncan.

And so what I'd just like to do is just walk us through progress against the five pillars of the growth strategy over the last year. And just as a reminder, what the strategy does is it says, well, basically, if our core skill set is in building brands and growing brands in a sustainable and profitable way, if we take that capability and spread it more broadly than just our core brands in our UK core categories, then in principle, we can generate more growth, we can generate more value and build a bigger business. So, obviously, starting on the left, having said that, the central gravity of the business at the moment is very much in our core categories in the UK, and therefore continuing to make that grow and nurture that is very important. And then pillars three, four and five are really saying, well, what are the other places that we could play? um so taking our brands into new categories within the uk where historically we've not generated revenue before so that's all incremental white space building the business um overseas and then obviously as duncan talked about buying brands that we can then bring into the business and grow um pillar two is i call it a facilitation strategy in a sense it's uh it's that investment back into the supply chain so taking some of that cash investing it back into the ability to make new products and also in making ourselves more efficient, and that efficiency obviously flows through to margins, which helps fund the investment behind the brands. So that's the strategy that's working really well for us, and we're continuing to pursue it really aggressively, and let's just look at how that's played out through the year. And it's founded, of course, in this... what we call the branded growth models. This is how we build our brands and make them grow consistently over time. And the top left really points to the fact that in the UK, we start from a really great, strong position, don't we? Because we've got really well-known brands. They're known by pretty much everybody in the UK. They're in almost everybody's cupboard at home. In fact, most households will have more than one of them in the cupboard at any one time. And there's a lot of warm affection for the brands. When we talk to consumers, there's a really nice emotional proximity to the brands, which is a really great start point. But as I've said many times, that doesn't give you any growth. That just gives you somewhere to start. And the way you get growth are through the other things that you do. And one of the things we know is that the long-term health and growth of FMCG brands tends to correlate really strongly to new product development. So constantly bringing to market new products that serve consumers changing needs is a way in which you lock in that long term growth. And so that's why that's that's core to what we do. And that's why we put so much focus on new product development. And we base that on what I consider to be a really in-depth understanding of consumer trends. So we spend a lot of time understanding how how people are shopping, how they're cooking, how they're eating at home, and how that's changing over time. Because if we can understand those things, we can bring new products which fit with those changes and therefore get great traction with consumers. And then we've got those really strong brands, of course, but we need to keep nurturing them, keep building them. So we invest in marketing and advertising campaigns, which build the brands. It keeps the awareness high. It keeps them contemporary and relevant for consumers. And a lot of what we do with our media investment, our advertising investment, is really about building emotional connections, emotional bonds with consumers. And then finally, the fourth part of the model, but very importantly, is the way in which we try to build strategic partnerships with our key retailers. We know that that delivers outstanding in-store execution, but if we work with them together on building category growth, mutual category growth for both of us, we will tend to benefit disproportionately. And the reason for that is, of course, is that we've got usually the biggest brands in the category. So if we grow the category together, we'll tend to get the biggest benefit from it. So it's a really well-proven model. It's what we've been running for a number of years now. It's not dissimilar at all to some of the big multinational branded manufacturers either. But as I say, it works really well for us. And it's a classic case of the total model is greater than the sum of the parts. And if we look at how that's played out on our UK brands over the last six years, on the left-hand side, that is the revenue trend from our UK brands. And you can see consistent strong growth with that blip in the middle that I mentioned earlier when everyone was eating at home because of the pandemic. If we look at our grocery brands and look at their market share, we've consistently increased market share year after year after year, and that's 200 basis points of market share gain in our grocery brands over the last three years. So over the last year, we continued to work on those key five consumer trends that I've talked about before, with health and nutrition again being the most important. And we brought a whole series of brands to market, a whole series of new products under our brands to market during the year. There's just a couple of examples here. So Ambrosia Deluxe is based on that fourth trend, which is indulgence. And we know what consumers are telling us is, look, I'm trying to be healthy, but when I do want to be indulgent, it's got to be worth it. So make it worth my while, please. And this is Ambrosia having a deluxe version of its custard and rice puddings. But actually, interestingly, these score less than four on the government nutrition profiling model, so they're not classified as HFSS, even though they're creamier than our core custard range. The custard we launched a couple of years ago, it did really well. Last year, we launched rice as well. These now represent 7% of the Ambrosia core business. Last year, they grew at 155%. um and we're supporting that now with um with out of home media as well as install support another good example um also on the indulgence trend is mr kipling's best ever mince pies i don't know if you saw these over over christmas um so this was really our chef sort of getting right right down to to basics and what would it be if you could build a perfect mince pie and so working really closely with consumers okay what would it look like what would the pastry be like what shape would it be how big would it be what would the fruit be like and constructing something which is as close to perfect as we could possibly get. And if you look online, the consumer reviews are outstanding. They're nearly all five stars. And this contributed to Mr Kipling's share growth in mince pies versus a year ago. I think I was probably one of the main drivers of that personally, actually, because they are really, really good at good, although I don't think I fit into the fact that it attracted a younger demographic. And then what we've done on the right hand side, of course, is we continue to invest in the brands. That's very much part of our model. We had seven of our major brands on TV, including supporting that best restaurant in town campaign. And of course, we also use digital and we use more and more out of home as well, particularly to drive awareness of the new products. And then I said in-store execution was really important. So we've continued to drive that. Some great stats over on the left hand side there. So. We actually managed to get more products into more stores this year or last year than we did the year before. In fact, if you think about all the products we've got across all the stores, a huge number, and that improved by 1.2%. So really, really great performance. And it was particularly strong in the second half of the year after the main retailers had done their annual range reviews and we just got more products into those ranges. And then getting that visibility, those big displays, the gondola ends, also very important. And actually our grocery brands had 34% more off-shelf exposure last year than in the prior year. And that was already off a pretty high base. And that includes things like the example here, the brands partnering up with movie franchises and gaming franchises. So this was Bachelors partnering up with the launch of the Aquaman movie. There's an on-pack offer where consumers can win prizes. And then from a retailer point of view, you get these enormous displays in store. And I can tell you the amount of volume you move off those displays is really quite impressive. Another really nice example comes out of our partnership with FairShare. And this is a promotion. We ran it the year before last, but it worked so well, we ran it again last year. And it's called Win a Dinner, Give a Dinner. And the idea is there's an on-pack promotion across a number of our brands. And you can win a shopping voucher to essentially cook a meal for your family. But if you win, you also simultaneously win the same for somebody in food poverty via the fair share charity. And then working closely with retailers, it means we're able to get displays like this. So this is an entire gondola end in Tesco with just Premier Foods brands on it. So you've got Bisto, Paxo, Sharwoods, Lloyd Grossman and Ambrosia, all the brands participating in that promotion, all on a gondola end at the same time. So, you know, absolutely fantastic exposure for the brands and drives a lot of incremental volume. I also thought it'd be worth mentioning just how strong our Nissin partnership is, which just continues to go from strength to strength. On the left-hand side, you've got the revenue we generate from sale of Nissin-branded products in the UK. And it started in 1819, very, very, very small piece of business, low single-digit millions. And then you look at that trajectory, we're almost getting to £40 million of turnover with Nissin in the last year. That is a 54% five-year CAGR, which is not something I don't think I've ever seen before. And we now have a 68% market share turnover. of the authentic noodle category in the UK. So really just tremendous trajectory. Driven initially by Soba, the Soba Pot Noodles, and then we extended out into the Block or Bag Noodles, which is this product here. And we've also launched Nissin's Cup Noodle, which is their global brand. And then also, it's not included in those numbers, but also as a reminder that Nissim make for us our bachelor's noodle pots as well, using their incredible noodle wizardry. Really, what they don't know about noodles is not worth knowing. But there's more to come. So we will take over the distribution of their authentic Demi-Ramen product this year. That'll happen later on in the year. And we believe there's opportunity there to extend that out into more retailers, just like we did with Sober. And we're working closely with Nissin now on other things that we might bring to market. So I was out in Tokyo a couple of weeks ago with our chief marketing officer, working with the team at Nissin, looking at all the things that they make. And I can say we ate a lot over those few days, trying all the different things that we could possibly bring into the UK. So it's a great relationship, and it just keeps going from strength to strength. And then, obviously, a quick word on inflation. On the left-hand side, you've got the ONS inflation for food and non-alcoholic beverages. And you can see that huge spike that was sort of peaked around this time a year ago and the way that's fallen back down to something starting to approach normality. What you might find interesting is what's happened during the last year to our volume and price dynamics as they contribute to our growth. So the sort of lighter green coloured line is price. So we started the year with, compared to the year ago base, we got two big price increases in those numbers. So that was driving a lot of value. And as I said, we obviously were losing some volume because of price elasticity. But the volume loss was a lot less than we expected, particularly on the grocery side of the business. And as we went through the year, you can see we start to lap some of the pricing. So, therefore, the price element starts to fall and the volume trend improves. And I always said that quarter four was going to be a transitionary quarter, and you can absolutely see that. We went into the quarter with higher value per unit and actually a little bit less on volume, and we exited the quarter with volume-driven growth at a slightly lower price per unit because, of course, we've sharpened some of our promotional prices And really, it's that exit rate out of the end of Q4 is what we expect to flow through into this financial year and is actually broadly what we're seeing as well. The other thing that might be useful is just looking at our UK branded business and looking at the three-year growth CAGR split over 17 to 20 and 21 to 24. So during that inflationary period, we've got a three-year growth CAGR of about 5%. And in the periods before it, it's more like 3%. And it might also be helpful to remember that that 3%, we said before, was broadly made up of about half volume and half price mix. So you might find that helpful in terms of thinking forward. Moving on to the second strategic pillar. So this is our infrastructure investment. And we love the virtuous cycle you get here. We invest some of the cash in our manufacturing operations. It improves our margins. We invest some of that back into our brands. And that drives more growth and fuels more brand growth and cash generation. We've still got a really great list of projects that have got relatively short paybacks in that three to four year timeframe. So hence why we've increased our capital investment for this last year. A lot of focus is on efficiency, as I say, and in particular energy reduction. Any reduction investment is great because given the cost of energy, we have relatively short payback periods and they're a great way of saving cost. But at the same time, we're also reducing our scope one and two emissions. So we're meeting our obligations on our net zero roadmap. One little example through the year was we started replacing our air compressors. We use a lot of compressed air in some of our manufacturing processes. We've replaced six of the eight so far across a number of the sites. And the interesting thing here is the new technology is just so much more efficient that we lose a lot less electricity reduces our scope 2 emissions paybacks less than three years and what we've also now worked out what we can do is because these things generate heat when they're working we can flow water through them and it comes out as hot water which we can then use in the washrooms and things which obviously again is saving you on scope 2 and also on heating costs I talked about the solar panels on Stoke. Again, strong payback, less than four years. Essentially, it's free electricity from that point, and so reduces scope too. And we're working on the roofs across the rest of the sites as well to see what might be possible. And then this one on the right-hand side is a really nice example of investing in automation. So this is phase two of the automation of our sponge puddings line. where we've automated the retorts. So retorts are where we cook the product at the end of the process. This was a very manual process before. So automating has done two things. It's increased capacity, which is very helpful. But it's also significantly improved efficiency and made it a lot lower cost to produce. What we've done with some of that cost is we've been able to compete, be more competitive in our promotional pricing. And what that's done is it's actually led to a significant increase in volume. So sales of Mr Kipling's sponge puddings last year increased by 26% and did so at a higher margin than the prior year. So I think that's just a great example of where investment in automation can be a real win for us. Moving on to the third pillar, this is our new categories. So still a fairly modest base, but really fantastic trajectory, 72% growth. You might remember last year we were very excited. Porridge was doing really well. We'd got to a 5% market share of what was already a a double-digit growth segment of breakfast. Well, I'm pleased to say that we more than doubled our sales of porridge in the last year. And we've now got over 10% share of that category. And in the first retailer we launched in, we've now got a 20% market share, which gives you sort of an indication of the direction of travel. And we've actually now started to include that in our marketing. And so the image you see there is taken from the end of the Ambrosia TV ad, which we've now included porridge into. Ice cream sales were up 56%, particularly strong growth in half two. And that's actually now we've taken that from just being in Iceland. You might remember that was an experiment originally just in Iceland. And that's now in Asda and Morrison's and doing really very well, actually. And we've got an extension that's literally just come to market this year to go into handheld ice creams with Angel Delight. Oxo marinade is working really well. 92% growth. We've now got five flavours of that. It started off as an experiment in Asda. It's now in Asda, Ocado, Tesco, and we've just agreed it's going into Sainsbury's. So that continues to do very well. And one of the reasons we really like this is it helps to de-seasonalise Oxo. So OXO tends to be used in meals that we make when the weather's cold. And this will tend to be used when the weather's hot on barbecue. So it just starts to balance the brand out a little bit. And also Cape Hoods and Spice doing really well. It's now in all the major retailers and growing at 77%. The international business, as I said, grew by 12%. Ireland had a really cracking year, 17% growth. When we bought the Spice Tailor, it was only present in one retailer in Ireland. We've now started to roll that out across the rest of the retailers. So Spice Tailor sales doubled in Ireland following that. Australia, we've got that strong market leadership position in cake, and I feel like I say this every year, but yet again, we had a record market share, a new record market share for cake in Australia, and also now with a combination of Sharwoods and the Spicetailer with a market leader in Indian sources too. Now, that great performance in market, as I said earlier in the year, didn't translate through into turnover because of a reduction in stock levels on the water between the UK and Australia and then in warehousing in Australia, and bearing in mind that the retailer has title to the goods once they leave the dockside in the UK. um europe is middle eastern africa um 28 growth so another great performance and and really charlwood's is our focus in in that region and that was all driven by incremental distribution so we got 4 700 more distribution points which helped drive that number. And then similarly in the US, 35% growth, and that was driven by more distribution of Sharwoods and more distribution of Mr Kipling, with Mr Kipling now up to 3,000 stores in the US. And actually also now we've started to roll the spice tailor out in the US. We've got agreement for 1,000 stores initially of the spice tailor, and we'll continue to work on that, obviously. Which brings me neatly actually to the Spice Tailor, so the fifth pillar of the growth strategy. The Spice Tailor performed very well, good strong double-digit sales growth, increased market share and in fact delivering returns ahead of our acquisition model. And this is playing out almost exactly as we expected, if not a little better actually. So we expected we could get more distribution for the Spice Tailor in the UK, we felt as though it deserved that and with our sales capabilities, we were able to secure that, particularly significant gains in Asda and Morrisons. And we've also been able to get much bigger and much more impactful displays in store as well, which we know helps drive trial by new consumers, as does our initial steps into brand advertising. So we've now got a digital TV advert if you like, for the brand which we're trialling in the UK and in Australia with a view to if that's successful, then we might look to put it on mainstream TV. And the logic there is we know that the Spicetail has a really, really high repeat rate. The number of people who try it, who then go on to buy again and again, and it becomes part of their routine, is really as high as anything we've got in our portfolio. So if we can make more people aware of the brand, get more people to try it, then we'll build a bigger user base for the future. And while the commercial team have been doing all that, the chefs have been busy away coming up with all sorts of new recipes. And you'll start to see those come to market over the next few months. So this year, in fact, one of the first there is a range of premium stir fry sauces, which have just gone into market. And then from an overseas point of view, originally when we bought this, as I say, it was present in strength in the UK and Australia. But it had a little bit of presence in Ireland and Canada, but really quite small. And we've been able to expand that presence in Ireland, I've talked about, and in Canada. But we've now got to the point where we're in 10 markets. And we'll continue to push that out into more stores in those markets and indeed probably more European markets as well. Fuel 10k, obviously much earlier stage, fully integrated now into the business. Growth for the year was 30%. That's obviously on a pro forma basis. Strong market share gains of 130 basis points. And again, initial returns ahead of our internal acquisition model. So very happy with the way that's going. And what we've been able to do so far is talk to retailers about Fuel 10K and Ambrosia Porridge Pots together. And we've been able to secure some really big impactful displays like you see there. And we've already got some new products coming to market on the left there. This is a high protein, 25 gram protein breakfast shake. This was something that was already in. the Fuel 10K team's pipeline, but we're now bringing to market. And then what we've got here is a range of nutritionally complete meals, either as a shake that you make up or as a rice-based product. And these are direct to consumer at this point. This is something we were working on in Premier Foods, but having bought Fuel 10K, that was a stronger brand name for us to put it under. So we've done it under Fuel 10K. And that's literally just gone to market. I thought it might be worth a recap on what our M&A approach is. There's nothing I haven't said before here, but just to bring it all in one place. So, look, we are, you know, our core skill set is in building brands. So anything we buy, we're looking to buy brands. And we're looking for brands that we think have got strong potential, like the Spice, Stellar and Fuel 10K have. And brands which... we believe that when we apply our branded growth model, we'll deliver disproportionately strong performance. And we're very choiceful, as you know, with what we're looking at. We're very fussy indeed, actually. And the two brands we've bought, neither of them were actually for sale. We'd identified them as things that we'd like to have in our portfolio and approached the owners. And frankly, we're looking all the time. So we're constantly looking for more brands that might be similar to Fuel 10K or Spice Tailor. They might be a bit bigger, of course, because we've got the capital to do that now. But we're also looking at international targets, because one of the things we could do here is buy a branded business in an overseas market and use that as a bridgehead by which then we can bring the Spice, Taylor, Fuel 10K, Mr Kipling, et cetera, into market in an accelerated way, do that much quicker than we can do just ourselves. And as Duncan said, strong financial discipline will remain, a focus on ROIC, actually, and... As Duncan also said, at the moment we're obviously in a cash building phase when we find an acquisition, leverage will pop up a little bit and then we'll generate cash and bring it back down so you'll get this oscillation effect. So if I move on just very briefly to talk about the current year. So as you would probably anticipate, we'll be driving all the pillars of the strategy. So UK branded core, there's lots of new products coming to market. This is just a little snapshot of things that are happening right now. So extensions on the Spice Tailor, on Lloyd Grossman. Lloyd Grossman actually moving into Pesto, where they're really high quality, genuine Italian style pesto, which is slightly different from what you can get generally in the UK market. There's the Demo Ramen products from Nissin we talked about, and then some very, very indulgent and delicious Mr Kipling chocolate cakes there as well. In terms of infrastructure investment, we'll be investing in growth and efficiency. One of the growth investments we'll make is we're expanding capacity for the Ambrosia porridge pots. That does two things. It allows us to continue to support the growth that we're seeing in the UK, and it opens the door to us to start selling it in some overseas markets as well. From an efficiency point of view, there's an awful lot going on. The one example I've pulled out, because we're really pleased with this, because it's a great example of innovation in process engineering as opposed to innovation in product. And this is our engineers came up with a completely new way to make icing at large scale, which significantly decreases energy utilisation and so therefore saves us quite a lot of money, but also, of course, therefore reduces our scope to emissions. In terms of new categories, you've got the extension of Angel Delight into handheld ice cream. So that picture there is an Angel Delight butterscotch flavour ice cream dipped in chocolate. What's not to like about that, really? And then we'll continue to drive, of course, the porridge pot. So that's very much our lead horse in new categories. And then from an overseas perspective, Mr Kipling, it's really about driving the sales of Mr Kipling now in North America. We've got those 4,000 stores now across North America, so really driving volume sales through that, continuing to build the leadership position in Australia and driving hard the rollout into New Zealand. And Sharwoods continues to be about distribution in Europe and distribution in North America. And the Spicetail, as you've seen, we've got 10 markets now. We'll continue to push that forward with more European markets. And we'll build store count across those as well. So plenty going on. And where does that leave us? Look, I think in summary, it's been another really strong year for the business. It's ahead of expectations, including ours. And I think that return to volume growth in Q4 was really important and played out exactly as we expected it to. As well as the financial performance, of course, strong progress against all five of the strategic pillars. And what we'll see this year is that return to volume growth, as we saw in Q4, accompanied by that lower price per unit as we've sharpened some of those promotional pricing. And we'll continue to drive the five pillar growth strategy, leveraging, of course, our brand building capabilities. And so, you know, based on what you've already just seen, we'd expect to make further progress this year. And our full year expectations are on track. And with that, of course, continued strong cash generation. And given the suspension of the pension deficit contributions, it means we've got increased capital to allocate against things like CapEx and M&A and dividend. So that's it from me. And we'd be very happy to take any questions.

I believe there's a roaming mic as well. Maybe question askers can wait for that. Thank you.

Firstly, well done on an excellent set of figures. Can we then talk about some consumer trends in the UK? Obviously, we've had a couple of years of high inflation, and that's been the focus for both the food producers and the retailers. Are you seeing changes now in how consumers are thinking about price and product range? And I think cooking sources have done particularly well because of a trend towards home eating. What are you seeing and thinking is going to happen over the year ahead and how you're responding to it?

I think in recent months, it's been relatively stable. So we did see this move from people eating out and having takeaways a little bit less often. And of course, that brings it into cooking at home, which is obviously where our sweet spot is. And so that was a trend we've definitely seen over the last couple of years. But I think that's pretty stable now. We're not seeing any dramatic changes in consumer habits at the moment.

And secondly, in North America, can you just give an update on the product range you've got in Mr. Kipling and also what you're now putting in Spicetailer and what sort of sell-through, now you're sort of lapping some of the trial areas, how's the sales building in the existing distribution?

Yeah, so the core range for Mr Kipling is the initial slicers range that we launched with, so four key flavours of slicers. Although we now have started to do some seasonal products. So one of the things that you may know about the States is they're very good at celebrating different seasons at different times of the year. So, you know, we've got Halloween range that will come later in the year. There's a Valentine's, you know, kind of pink cakes range. And so we're trying to key into some of those seasons. And this actually is quite interesting because that's one of the ways in which we originally built the Australian business. So the Australian business was built initially across a series of seasonal products that then became available as an all year round proposition. So we'll continue to do that. And I think we've also now launched Cherry Bakewells into the US as well. So it's important we don't get too carried away with the breadth of product range, because when a brand's in its early stage, you want to keep the velocities of the individual products, how quickly they sell at a reasonably good level. What you don't want to do is fragment it too much too quickly. So we have to sort of see how things go and just gradually expand the range. So that's basically where we are. Shelf rotations are good, and one of the things we'll be doing, focusing on over this next year, is how we use tailored, localised marketing programmes in order to build those velocities. Because obviously it's 4,000 stores, but it's 4,000 stores across the whole of North America, means it's pretty scattered. And so you've got to be very choiceful in your techniques that you use in order to build it. Yeah, and then Spice Taylor, I'd say first 1,000 stores in the US coming on stream. The range is obviously a shorter range, sort of three to five SKUs in most retailers. And one of the things we're doing is we're not being as focused on Indian as we are in the UK. We're using a broader East Asian range because that's got broader appeal in that market, because obviously it's got a different history to the UK. So the range as we roll out across different markets will be slightly different. That's great. Thanks. Thanks.

Thank you. Clive Black from Shore Capital. Firstly, just in terms of plant investment, where does capacity increase feature in the next few years for you? Or put another way, what sort of capacity utilization are you looking at at the moment in terms of spare space?

And, you know, broadly speaking, across the range, we don't have any significant, you know, glass ceilings on capacity, or at least not that's going to cause us a problem in the near future. Obviously, porridge pots were slightly different because it was a new product. We were making that on some adapted existing kit, and it's just got so big it needs its own. So that's the change there. But broadly speaking, we're not sitting here thinking that there's X lines that we've got to add into the business for capacity reasons. That's just not the case. Now, there may be lines we choose to replace to make them more efficient, but that's a different kind of decision.

I've got three questions in total. Secondly, could you just say something about Cadbury's? It's a third-party relationship, but you just haven't really said much about that today.

Yeah, so, you know, Cadbury's continues to do well. It's, you know, obviously we had that issue a year ago. And, you know, so the year-on-year performance has been very strong in the back half of the year. But, you know, a large part of that is because of that year-on-year impact. We've got a number of new products, product ranges, particularly seasonal ranges around Easter and Christmas in the works. And, yeah, it's a good strong relationship we've got with the guys at Mondelez.

And then lastly, you talked about more normal sales picture going forward in terms of inflation. Yeah. Am I correct in saying, though, that you're looking at low level or disinflation year on year with volume growth and any deflation is your own if you get my drift in terms of investing in promotions?

Yeah, that's absolutely the case. Yeah. And what we're doing there is, you know, one of the things you'll know is that we're quite analytical in how we look at these things. We've got a team that really works hard on the modelling of all this. And what we're doing now is we're trying to balance volume growth, value and profit delivery in a new pricing environment. Historically, pre-inflation, it's something we knew and understood in great detail across all our brand, in fact, actually all the sub ranges within the brands. We had to recalibrate quite significantly during inflation because the point of equilibrium where you're optimising your delivery changes quite dramatically. And then we've got to go through that process again now because it looks very much from what we've done so far is that being slightly sharper on our promotional pricing, given we've got that space from a falling commodity basket, is allowing us to optimise that at a slightly higher volume at a slightly lower price.

Just to follow up on that then, the underlying case price, excluding promotions, is still creeping up in terms of low-level inflation?

I'd say it's pretty flat, actually. Underlying case prices are flat.

James Edwards-Jones from RBC. A couple of questions. Why are you closing Charnwood? It seems like a decently profitable factory. You're taking an asset right down. It doesn't seem to make obvious financial sense. Same with Duncan. Getting into the weeds of the cash flow, there's a big increase in non-trading items, I think up to £14.4 million or something. Can you just say what that was?

Do you want to take the first one, Alex?

I'll take first, yeah.

So I mean, Charnwood makes non-branded, essentially commoditized ingredients. It makes frozen pizza bases that get sold to pizza restaurants and things. So it's really not. on strategy for us at all if you think about building consumer brands that sell through you know sell through retailers um you know historically it's uh we've kept it because it's it's been a profitable business but the um you know the trajectory is uh is is very much a downward one um so the combination of fact that this is going to get to a point relatively soon where it is not economically viable and it is off strategy and consuming an awful lot of management time It means it's a difficult decision, but it's the right one to close it and shift that energy and investment and effort into the brands, which we know we've had great success in driving.

And in terms of the restructuring cost, James, so this was largely closure of the Knighton site. So we took the P&L charge in the previous financial year, and then the cash, which is mainly redundancy, has flowed through this year. But as I said, we're expecting going forward to be much smaller, probably about £5 million, which includes Charmwood in the tail end of Knighton.

Hi, Matthew Webb from Investec. Can I start off by asking about market share trends? I mean, you set out the long-term picture of market share gains, which was obviously the right way of looking at it. But I think in the fourth quarter in grocery, your value market share was, give or take, flat. And I just wondered how we should think about that. Is that in the context of the shift from price-led to volume-led growth? And what does that then mean in terms of your expectations for the year to come? That's the first question.

Yeah, and it's a really good one, actually, because you're absolutely right. What happened with grocery just at the back end of the quarter as we shifted to that volume-led growth is something we don't talk about very often, which is volume market share. And so what happened is we then started to take quite a considerable amount of volume market share, but that doesn't necessarily move your value share if you're doing it at a lower price. So I think that's going to be quite an important internal indicator for us this year is seeing how our volume share moves, as well as just value share, because this is going to be a volume growth phase for us this year.

And then the second question, I think last time I asked you with reference to the U.S. rollout, whether you would be pausing at 2,000 stores, and you're obviously now at 3,000 stores. The answer was no. And I suppose I'm really asking the same question again at 3,000. Do we slow down there, or do we keep going?

We keep going, but I think we've also got to make sure that we are not just building distribution and moving on, because obviously we've then got to make sure we nurture the distribution we've got, make sure that the products drive value for the retailer and that we get growth. So there's a bit of a balance to be had here, I think, rather than just bolting on more and more stores. We've got to make sure that we drive what we've got as well.

OK, and then a final question for Duncan just on the pension issue. Now that you've got to the point where you're not making any cash contributions, I just wonder what else needs to be done before we get to the full resolution, because it's still, I think you've indicated end of February 26, so it's still a little way away. What are the sort of staging posts that we need to get past?

Yeah, probably a couple of main ones. Matthew, you know, it's a really good question. I think, first of all, we need the combined scheme to reach by out, you know, to reach by out surplus. We know we've had a surplus building on the RHM scheme and clearly the whole benefit of the merger was to use that surplus to help fund the deficit in the Premier Food Scheme. We are making great progress, and the suspension of deficit contributions probably shows, I guess, the combined confidence on our side and the trustees' side. But we aren't there yet. So we need the scheme to continue to build, build the surplus, get the asset returns, to get to a buyout threshold, if you like, when looking at all three of them.

getting closer but not quite there and then as you probably appreciate there's a load of stuff under the bonnet we need to do we've been doing it for a number of years we still need to do it and that's all about maximizing value and then sort of final just final follow-up question on that is that then the point where you would no longer need to dividend match in terms of cash contribution

Yeah, I think that's one of the many topics we visit at every valuation. But for now, I'd assume that at that point, that would be when the dividend match falls away and the administration costs fall away, yeah. Thank you very much.

Thanks, Darren Shelley, Shaw Capital. Just a question on M&A, thinking with the extra resource, does that change your thinking about the scale of M&A you're willing to do or the frequency of M&A?

I think it might change scale in the sense that we can afford to do things a bit bigger if that's what we find. I don't think it necessarily changes frequency because obviously what you don't want to do is you don't want to be putting your core business at any sort of risk because you're focusing parts of management on integrating a new business. You don't want that to be a distraction from driving your core. So you've got to get the balance right in terms of frequency. But certainly, yes, we're in a position where we could afford to do bigger if that's what we found.

In terms of frequency then, what do you think the business would be comfortable absorbing?

To be honest, it's more a function of how often we can find something that's ticking all our boxes. As I said, we are very fussy and will continue to be so. And it's difficult to find targets that are, as I say, ticking all the boxes for us. So they'll only come around every now and again.

Would you be willing to move into new categories or do you think it's core?

Yeah, absolutely. I think the first question we ask is, is this a brand with lots of growth potential if we were to apply our branded growth model? And if that's in a different category, it is in a different category. In fact, actually, to some extent, Fuel 10K wasn't an entirely new category to us, but we'd only got Ambrosia breakfast pots and Ambrosia porridge pots in breakfast. So essentially, that opens up breakfast

um for for us and if if if we found something that opened up another category for us then then all the better i think i think just to build on that darren i suppose you know when talking about that it probably means in in the sort of uk so sort of new category in a market we're in or we know well um or a new market with a category that we know well it's sort of unlikely at this stage we do a brand new category in a brand new market that we don't understand it's a fair point

Any more? No? OK, well, thanks very much, everybody. As I say, we've had another really good year. And I think we've got lots of exciting things to come for this year. So we'll see you at the half year.