Premier Foods Annual Report 2023

FY2023 Annual Report · Premier Foods

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Enriching life
through food

Premier Foods plc Annual Report for
the 52 weeks ended 1 April 2023

Contents

Overview

We are a purpose-led organisation.
Our company purpose – enriching life
through food – guides our actions, it
motivates us and is reflected in every
element of how we run our business.
It means ensuring the food we create
provides healthier options for our
consumers and that we are striving to
manufacture in a way that respects the
worlds natural resources. It also means
continuing to be a responsible and ethical
business which contributes positively to
our colleagues’ lives and the communities
where we are based.

OVERVIEW

Overview
Our ingredients
Our year in review

STRATEGIC REPORT

About Premier Foods
Our investment proposition
Our purpose
Our business model
Our values and culture
Consumer and market trends
Our strategy
Strategy in action
Chair’s statement
Chief Executive’s review
The Enriching Life Plan
Task Force on Climate-related Financial Disclosures
Operating and financial review
Key performance indicators (KPIs)
Risk management
Viability statement

GOVERNANCE

Governance framework
Board of directors
Governance overview
Nomination Committee report
Audit Committee report
Directors’ Remuneration report
Other statutory information
Statement of directors’ responsibilities

FINANCIAL STATEMENTS

Independent auditors’ report to the members of
Premier Foods plc
Consolidated financial statements
Notes to the consolidated financial statements
Company financial statements
Notes to the Company financial statements
Enriching Life Plan disclosure tables
Additional information

IFC
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→ Find us online at
www.premierfoods.co.uk

IFC

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Our Enriching
Life Plan

→ Read more on pages 26 to 37.

Our branded
growth model

→ Read more on pages 12 and 13.

Our strategy

→ Read more on pages 18 to 21.

LEADING

Brand positions

INSIGHT DRIVEN

New products

SUSTAINED MARKETING

Investment

RETAILER

Partnerships

FOR OUR

Consumers
Providing consumers with great
tasting food and offering healthier
food options, through products that
meet high nutritional standards.

FOR OUR

Planet
Place environment at the heart of
our operations: respecting natural
resources that make our food more
sustainable and free of unnecessary
or problematic packaging.

FOR OUR

People
Forge inclusive and fulfilling career
pathways that contribute to the
UK economy and give back to the
communities where we operate.

CONTINUE TO GROW

The UK core

SUPPLY CHAIN

Investment

EXPAND UK INTO

New categories

PICTURED BELOW:
Adrian Dixon of Manor Farm, Winchester,
who supplies wheat to our Andover Mill
for our McDougalls flour.

BUILD INTERNATIONAL BUSINESSES

With critical mass

INORGANIC

Opportunities

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSWe have leading
brands...

Flavourings & Seasonings

Quick Meals, Snacks & Soups

Ambient Desserts

Cooking Sauces & Accompaniments

Ambient Cakes

...that innovate to meet
consumers’ needs...

Our brands are leaders in their categories with high household penetration.We launch new products based on consumer trends, with a major focus on health and nutrition.1 Health and nutrition2 Convenience3 Snacking and on-the-go4 Indulgence5 Packaging sustainabilityPremier Foods plc Annual Report for the 52 weeks ended 1 April 2023...which are supported
by engaging marketing...

‘Devon knows’

‘Adventures in flavour. Since 1889’

...and strong customer
partnerships.

‘Dad’s night in’

‘Piano’

‘Tasty’

‘Sticking together’

Significant investment in TV advertising and digital activation behind six of our brands, creating emotional connections with consumers.Focused on driving mutual category growth and delivering outstanding in-store execution.Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOur ingredients

We aim to give our consumers great tasting products
made from quality ingredients. Under our Enriching Life
Plan, we have set a target to more than double the sales of
products that meet high nutritional standards. We source
our ingredients in a responsible manner to give consumers
confidence that the food they purchase is produced in an
ethical and sustainable way.

We source a wide range of healthy, natural ingredients
for our products, purchasing raw ingredients from a
range of suppliers in the UK and from markets around the
world. Last year we purchased over 290,000 tonnes of
food ingredients, working with around 260 suppliers, to
develop long-term sustainable partnerships which deliver
mutual benefits.

Last year we purchased around:

20,000 tonnes of
tomatoes from Spain
and Portugal,
for our Sharwood’s,
Loyd Grossman and
Homepride sauces.

44,500 tonnes of
wheat from UK
farmers,
for our Andover Mill, which
is used to make bagged flour
and baking mixes, including
McDougalls.

2,600 tonnes of
Bramley apples
from UK orchards,
for products such as our
Mr Kipling fruit pies.

PICTURE: Tomatoes from the Ribatejo
region of Portugal.

PICTURE: Wheat harvest at Manor Farm,
Winchester.

PICTURE: Bramley apples from the Mackle
Apple Orchard in Wisbech, Cambridgeshire.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023CASE STUDY

West Country milk
The Blee family has milked cows on their
220-acre farm at Lower Trenower on
Cornwall’s Lizard Peninsula since 1945.
Their current herd of 160 Friesian Holsteins
provides milk to clotted cream supplier
Rodda’s, where the cream and fat are taken
out before the remaining skimmed milk
is transferred to the Ambrosia Creamery
in Lifton in Devon to be used in Ambrosia
custard and rice pudding.

The farm remains a family business, run by
Stephen and Jane with their son Chris and
two other part-time employees. The cows
are grazed for eight to nine months of the
year and the family works closely with an
agronomist – an expert in soil management –
to keep the grass healthy and rich in nutrients.
The Blees operate a low-stress system,
which means the cows all calf during the late
summer and autumn, are milked through the
winter and spring and then milking times are
reduced over the summer.

After more than 70 years
in the family, our Cornish
land is the secret to our
success. It provides the
crops and space to enable
us to milk the cows and
raise our youngstock, in a
way which is harmonious
with nature, and the result
is high-quality fresh milk
which we’re proud to see
used in such well-loved
and iconic products.”
Stephen Blee
Dairy farmer

2,500 tonnes of
rice from Italy
and Spain,
for our Ambrosia rice pudding
and Batchelors savoury rice.

67 tonnes of
parsley from
the UK,
for our Paxo stuffing,
Batchelors Cup-a-Soup and
Loyd Grossman pasta pots.

PICTURE: Arborio rice field in the Piemonte
region of Italy, in the foothills of the Alps.

PICTURE: Parsley crop from Sleaford Foods,
a family-run producer in Lincolnshire.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTS
Our year in review

Over the year, we have made strong strategic progress with revenue
ahead of expectations and strong profit growth versus the prior year.
Our branded growth model continues to deliver sales growth through
new product development (‘NPD’), sustained consumer marketing
investment and excellent in-store execution.

Statutory measures include seven months’
ownership of The Spice Tailor for FY22/23.
Trading profit and adjusted basic EPS for
FY22/23, and the prior year comparatives,
are stated including software amortisation.

A definition of Alternative Performance
Measures and a reconciliation between
headline and statutory measures are
provided in the appendices on pages 53
to 55.

Revenue (£m)

FY22/23

FY21/22

FY20/21

FY19/20

FY18/19

Net debt1 (£m)

FY22/23

FY21/22

FY20/21

FY19/20

FY18/19

£1,006.4m

Trading profit1,2 (£m)
FY22/23

£900.5m

FY21/22

£934.2m

FY20/21

£847.1m

FY19/20

£824.3m

FY18/19

Profit/(loss) before tax (£m)

£157.5m

FY22/23

£141.2m

FY21/22

£141.6m

FY20/21

£124.0m

FY19/20

£117.1m

FY18/19

£112.4m

£102.6m

£122.8m

£53.6m

£(42.7)m

Net debt to adjusted EBITDA ratio1
1.5x
FY22/23

£274.3m

£285.0m

FY21/22

£332.7m

FY20/21

£429.6m

FY19/20

£469.9m

FY18/19

1.7x

2.0x

2.8x

3.2x

Scope 1 & 2 emissions3 (tCO2e)

FY22/23

FY21/22

FY20/21

51,749

56,188

60,359

£157.5m

Trading profit
+11.5% versus prior year1,2

12.9p

Adjusted basic EPS
+12.7% versus prior year1,2

1.44p

Final dividend
Final dividend of 1.44 pence per share proposed, up 20% on
prior year

£335.0m

Sales of products that meet high nutritional standards

A definition of Alternative Performance Measures and a reconciliation between headline and statutory measures are provided in the appendices on pages 53 to 55. Net debt for
FY18/19 is stated pre adoption of IFRS16.

2 Trading profit and adjusted basic EPS for FY22/23 are stated including software amortisation, and the prior year comparatives have been re-stated accordingly.
3 Total Scope 1 & 2 Greenhouse Gas Emissions – location based.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023
Strategic
report

IN THIS SECTION

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10
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67

Premier Foods plc
www.premierfoods.co.uk

About Premier Foods

As one of the UK’s leading food businesses, we’re passionate about food
and believe, each and every day, we have the opportunity to enrich life
for everyone. Premier Foods employs over 4,000 people operating from
15 sites across the country, supplying a range of customers with our iconic
brands which feature in millions of homes every day.

We operate primarily in the ambient food sector, which is one of the
largest sectors within the total UK grocery market. We operate in four
key Grocery categories and the Ambient Cakes category. Our brands are
leaders in their categories with high household penetration, and 84% of
our total revenue comes from branded products.

Categories

Brands

Position

Flavourings
& Seasonings

Quick Meals,
Snacks & Soups

Ambient
Desserts

Cooking Sauces &
Accompaniments

Ambient
Cakes

44%

36%

39%

15%

19%

Source: category position and market share: IRI, 52 weeks ending 1 April 2023.

Nissin
We entered into a co-operation agreement
with Nissin Foods Holdings Co., Limited
(‘Nissin’) in 2016, and have launched
Batchelors Super Noodles in a new pot
format, using Nissin’s leading noodle
technology and manufacturing expertise.
In addition, we have taken on distribution
of Nissin’s Soba noodles and brought the Cup
Noodle brand to the market. Nissin noodles
have grown market share from 19% in 2019
to 53% today, and are now the market leader
in the authentic snack pot market.

Strategic partnerships

Mondelēz International
In 2017, we signed a new strategic global
partnership with Mondelēz International to
renew the Company’s long-standing licence
to produce and market Cadbury branded
cake, as well as home baking and ambient
dessert products. The partnership covers
multiple countries and has the potential
to use the full range of Cadbury brands in
ambient cake.

Customers
We seek to execute our branded
growth model through seeking strategic
alignment with our customers, developing
best-in-class, differentiated plans across
all channels and formats.

We operate a multi-format, multi-channel
approach to serving a broad range
of customers, including major UK
supermarkets, discounters, e-commerce
channels, convenience stores, wholesalers
and foodservice operators.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Our international business

We are driving growth in our international
business through the deployment of our
branded growth model, with the aim to
achieve critical mass in our strategic focus
markets. Our largest international businesses
are in Australia and Ireland, where we

have established strategic relationships
in our focus categories with the leading
retailers in both markets. Our focus is on
Mr Kipling, Sharwood’s cooking sauces
and now The Spice Tailor to build global
brands and to create a business of scale,

over time, in North America and Europe.
Our international business has grown +37%
since the launch of our new strategy in 2020
(excluding The Spice Tailor), and delivered
another strong performance in the year, with
sales +10% on a constant currency basis.

+10%

International
revenue growth

Canada

USA

Ireland

Europe

Australia

Building distribution
of Sharwood’s, we
have seen particular
success with Walmart
in Canada. Overall,
revenue was up
+125% versus
prior year.

Following the
successful test of
Mr Kipling in over
200 stores, we are
starting to build
distribution with
customers.

We are also preparing
plans to launch The
Spice Tailor.

Revenue growth +6%
versus prior year with
strong performances
with our three major
retailers.

Of particular note,
were sales of Soba
Noodles, which more
than doubled versus
prior year.

Growing distribution
for Sharwood’s in a
range of European
markets including,
Spain, Germany and
the Netherlands.
Additionally, we are
preparing to launch
The Spice Tailor.

Record market share
for cake in Australia of
15.6% and Mr Kipling
has extended it’s
leadership position.

Now market leader in
Indian cooking sauces
with Sharwood’s and
The Spice Tailor.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTS
Our investment proposition

Outlined below are a range of attributes, which we believe make the
Group an attractive investment for equity and debt investors alike.

Proven branded growth model

Strong margin profile

Brands are at the heart of the business
and will drive our future growth.

Through our market-leading brands,
we invest in emotionally engaging
advertising, launch insight-driven
new products and foster collaborative
partnerships with our retail customers.

Through this proven branded growth
model, we have continued to deliver
consistent branded revenue growth in
the UK, which has increased by 5.3%,
on average, over the last three years.

We are applying our branded growth
model to deliver value in other areas
of our strategy e.g. new categories,
international and acquisitions.

Our adjusted EBITDA % margins
compare very favourably with many
of our sector peers, including branded
multinational FMCG businesses.

These strong margins provide the
platform for us to continually invest
behind our brands, through marketing
investment and product innovation.

In FY22/23, our adjusted EBITDA %
margins were 18.1%, reflecting the
sustained delivery of our branded
growth model, facilitated by the
strength of our category-leading
brands.

Highly cash generative

Pension obligations solution

We operate a business which is,
underlying, highly cash generative.
With our strong adjusted EBITDA
margins, lower financing costs
and proportionate levels of capital
investment we generate attractive
levels of free cash flow.

We maintain a Net debt/adjusted
EBITDA medium-term target of 1.5x
and in FY22/23, we completed our
first acquisition in 15 years without
increasing our leverage.

In June 2020, we completed a
segregated merger of our pension
schemes into one single Trust. This
arrangement paves the way to
potentially substantially lower the
pension cash contributions currently
made by the Company to the pension
schemes. In time, we expect one or
more sections of the pension scheme
to progress to full resolution.

Portfolio of category
leading brands

We are market leader in the five
main categories in the UK in which
we operate.

These market shares range from
15% to 44% and many of our brands
display a high degree of household
penetration.

Over 91% of UK households purchase
one or more Premier Foods products
every year.

We are building ever stronger positions
in our categories overseas, particularly
our leading markets of Australia and
Ireland. An example being cake, where
Mr Kipling is the No. 1 brand in the UK,
Ireland and Australia.

Continual supply
chain investment

We run an ongoing capital investment
programme throughout our supply
chain to capture opportunities for
growth, enhance site efficiency
through cost reduction initiatives and
upgrade our infrastructure.

We have a pipeline of automation
projects from which we expect to
generate further efficiency gains and
we plan to steadily build our capital
investment over the medium-term.

Responsible in all that we do

Our ESG strategy – the Enriching Life
Plan – is articulated through our three
strategic pillars of Product, Planet and
People. We have set out our ambitions
and targets under each pillar as we
ensure the food we create helps
enable people to lead sustainable,
healthier lifestyles.

The Enriching Life Plan covers all
aspects of sustainable development
and encompasses everything we
touch, from the ingredients we source
to the communities we serve.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Our purpose

Our company purpose – enriching life through food – guides our actions, it
motivates us and is reflected in every element of how we run our business.
It means providing consumers with great tasting food and offering healthier
food options, through products that meet high nutritional standards.

Enriching life through food is also about
producing food in a way that respects the
world’s resources, the same resources we
rely on to make our delicious food. Whether
that’s reducing our environmental footprint
through climate action, reducing food
waste, or maintaining high ethical standards
across our supply chain.

It also means enriching life for our
colleagues by creating an inclusive culture of
entrepreneurship, where people can reach
their full potential, as well as attracting the
very best talent and embracing diversity
along the way.

By continuing to enrich the lives of our
consumers and our colleagues as well as
the planet we live on, we can nurture our
business effectively and sustainably, and
look forward to many more years of healthy
growth ahead of us.

Enriching Life Plan
As one of the UK’s leading food producers
and home to some of the nation’s most
loved and iconic brands, we have both an
opportunity and a responsibility to forge a
healthier future for our planet and everyone
on it. Our sustainability strategy, known
as the Enriching Life Plan, encompasses

everything we touch, from the products
we make to the ingredients we source
and the communities we operate in.

With our purpose, enriching life through
food, at its heart, the plan highlights our
commitment to a more sustainable food
system and, in turn, the UN Sustainable
Development Goals. Guiding our work to
2030, it sets out our ambitions to make
more nutritious and sustainable food,
contribute to a healthier planet and nourish
the lives of our colleagues and communities.

→ Read more about the Enriching Life Plan

on pages 26 to 37.

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Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTS

Our business model

Our branded growth model is how we drive sustainable, profitable growth through
leveraging our strong leading brands, bringing new products to market that are based on
a deep understanding of our consumers changing lives and needs, supporting our brands
with engaging advertising and marketing campaigns and by building strong strategic
partnerships with our key retailers and delivering outstanding in-store execution.

Our
capabilities

Consumer insight
We have deep understanding of our consumers,
based around insights on how they shop, how
they cook and how they eat. We use this insight,
together with our knowledge of new and emerging
food trends, to develop and launch products that
meet their needs.

Colleagues
Our unique and inclusive culture helps us to
attract and retain talented colleagues across our
business. Our experienced leadership teams,
have a broad and deep understanding of the
food industry, and are focused on delivering
exceptional performance.

Sourcing
We are committed to producing high-quality
food that is sourced in a fair, ethical and
environmentally responsible way.

Manufacturing
Our strong manufacturing capabilities allow us
to manufacture a diverse range of high quality
products with enhanced efficiency, whilst
maintaining our leading standards of safety, both
for our food and our colleagues.

Our branded
growth model

LEADING

Brand positions

Our brands are leaders in their categories with
high household penetration.

INSIGHT DRIVEN

New products
We launch new products linked to key consumer
trends, with a major focus on health and
nutrition.

SUSTAINED MARKETING

Investment
We create emotional connections, through
media, to build brands, maintain awareness and
keep them contemporary.

RETAILER

Partnerships
Our partnerships are focused on driving mutual
category growth and delivering outstanding
in-store execution.

Our
values
and
culture

We’re determined
to be the best,
consistently
delivering at the
highest level.

We’re creative
in what we do
and how we
do it.

We’re energetic
and act with
pace.

We achieve
more when we
work together.

We bring out
the best in
each other.

→ Read more about Our values and culture

on page 14.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Our ESG
commitments

OUR

Consumers
Providing consumers with great tasting
food and offering healthier food options,
through products that meet high
nutritional standards.

OUR

Planet
Place environment at the heart of our
operations: respecting natural resources
that make our food more sustainable
and free of unnecessary or problematic
packaging.

OUR

People
Forge inclusive and fulfilling career
pathways that contribute to the UK
economy and give back to the communities
where we operate.

How we deliver value
for our stakeholders

Consumers and customers
By creating and launching new products which
meet consumers’ needs, we can help our
customers to drive category growth.

Colleagues
We’re committed to creating a truly great place
to work for our 4,000 colleagues, which provides
opportunities to develop and grow in an inclusive
and diverse environment.

Suppliers
We develop strong relationships based on
mutual respect and trust, to source high-quality
ingredients at the right price for the long-term
benefit of both parties.

Shareholders
Our business model is focused on delivering
sustainable profitable growth and long-term
shareholder value. Over the past three years,
we have delivered shareholder return of 429%
and we are now a member of the FTSE 250.

Communities
We build strong bonds with the local communities
in which we operate, providing long-term
employment opportunities and make meaningful
contributions through our charitable giving and
volunteering programmes.

The
impact
we are
making

91%

of UK households purchased one of our
products last year.

increase in revenue from new categories.

33%
76%response rate to our colleague diversity

data survey.

90%of our spend is with our top 250 suppliers.
429%shareholder return delivered over the last three years.
726,530

meals provided to help those in food poverty.1
1 See page 35 for definition.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOur values and culture

An important element of our purpose is to enrich the life of our
colleagues, by creating an inclusive culture of entrepreneurship, where
people can reach their full potential, as well as attracting and retaining
the very best talent and embracing diversity.

As one of the UK’s leading food
producers, we employ over 4,000
colleagues, and we’re committed to
creating a truly great place to work.
Our shared values are the DNA of our
business, helping guide us in the way
we do things. They give us a common
framework for decision-making and
enable us to challenge ourselves, and
each other, to ensure we live them
day-by-day.

We’re
determined to
be the best,
consistently
delivering at the
highest level.

We’re creative
in what we do
and how we
do it.

We’re energetic
and act with
pace.

We achieve
more when we
work together.

We bring out
the best in
each other.

Creating a more modern and
flexible working environment
As part of the ongoing evolution of our
hybrid working model, we have been
looking at how best to evolve our Head
Office environment to better suit our
personal and business needs.

We asked all our colleagues who were
either based at or were regular users of
our Head Office to participate in an online
survey and focus groups to understand how
we were utilising our office space, to inform
what the future of our office working should
look like.

Our conclusion was that we required a
more flexible office space that better
reflects how we now work, with less overall
space required than before. This means we
have been able to design a modern office
environment that is also smaller and more
agile and, when we relocate in Autumn
2023, it will cost us less to operate.

Recruitment and labour turnover
Our labour turnover levels are relatively
low, currently running at 12.1% versus an
industry average of around 20%. This level
is similar across both central and operations
functions, reflecting our positive culture and
strong employer brand.

Our in-house recruitment teams are
constantly evolving how we attract talent to
the business, making sure our processes are
always equitable, inclusive and transparent,
and that the new colleagues we recruit add
to the positive culture of the business.

We have introduced several initiatives to
reduce the likelihood of bias when it comes
to selection decisions, which include,
using software to ensure we are including
gender neutral language in job adverts and
adopting an ‘equality boost’ campaign that
encourages more diverse applicants.

12.1%

Total colleague turnover in FY22/23

Leadership development
To ensure our leaders and managers
are equipped for the next phase of our
growth journey, we have been working
in partnership with EY Lane 4 to develop
and implement a Leading Outperformance
Cultural Change Programme. The
programme has been designed around
our six leadership behaviours and enables
delegates to explore each of them and
‘try them on for size’ in a safe environment:

• Think big

• Drive change

• Act together

• Stay curious

• Spark brilliance

• Inspire ownership

After the successful completion of Phase 2,
which was targeted at our middle managers,
we are now entering the third and final year
of the rollout which will involve our more
junior management colleagues across the
organisation, which is a population of 375
colleagues.

14
14

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

CELEBRATING BLACK HISTORY MONTH

PROUD TO SUPPORT INTERNATIONAL MEN’S DAY

Mental Health Aware n e s s W e

To support new parents, there is the
provision of pre and post maternity support
and a package to help new mums navigate
the return to work, helping them re-
integrate into the business.

Inclusion and Diversity is a subject that is
constantly evolving and so we are always
looking at new ways to improve our
approach and ensure that everyone feels
it’s ‘ok to be me’ at Premier Foods.

94%

of operational colleagues have received
I&D awareness training

Alongside the training programme, we
created an I&D ambassador network, with
individuals responsible for celebrating and
marking important cultural calendar events
throughout the year, whether this is Black
History Month, International Women’s Day,
Pride or Menopause Day, for example.

Since the launch of this network, colleagues
have engaged very quickly and are more
willing to tell their own stories. We host
colleague panels enabling people to ask
questions or volunteer information about
their own experiences and stories.

Following the development of our
menopause policy, we launched menopause
cafés, with dedicated Menopause Warriors;
something our female colleagues wanted so
that they could come forward and discuss
their experiences in a supportive setting.

In addition, we have launched a
Transgender policy, providing guidelines and
a checklist to support transgender people in
the workplace.

Evolving our inclusive culture
Inclusion and Diversity (‘I&D’) is a firm
priority for Premier Foods and is something
that is championed across each of our 15
sites, at all levels of the business.

We are continuing to work hard to place I&D
at the heart of what we do. We launched
our #oktobeme – a programme designed to
truly embed inclusion and diversity across
the business and ensure that everyone
feels safe to bring their true, authentic self
to work.

A key part of the programme’s success is
the fact that it is constantly evolving to
fit the needs of colleagues and ensure
that it is always ‘ok to be me’ at Premier
Foods. In 2022, the programme has been
firmly established, with the rollout of I&D
awareness training to our colleagues within
operations as well as introducing new
initiatives launched in response to colleague
feedback, including Menopause Warriors
hosting menopause cafés, dedicated
recruitment campaigns, ambassador
programmes and mentoring initiatives.

Working in partnership with Charlotte
Sweeney Associates, we developed a
bespoke I&D awareness exercise and
accompanying training programme that is
being rolled out across the business. Over
70 volunteer facilitators have been trained
to deliver the programme, which focuses on
encouraging people to be more aware and
to be open to conversations about I&D.

To date 94% of operational colleagues have
experienced the programme and all new
starters are taken through it, to promote
inclusive leadership and set the expectation
right from the outset that it’s ‘ok to be me’.

15
15

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSConsumer and market trends

The ambient Grocery market is shaped by a number of consumer, economic and
social trends and also the regulatory environment. Our insights team have a deep
understanding of consumer and market trends, so that we can develop compelling
new products and evolve our existing ranges to meet consumers’ needs.

Trend

Consumer budgets
under pressure
Impact
In recent months, with inflationary
pressure on many areas of household
expenditure, such as heating bills, fuel
and food, consumers’ disposable incomes
have been reducing. Consequently,
consumers have typically explored
options available to them to reduce their
expenditure on certain items, including
their weekly food bill.

Our response
Our portfolio has a broad range of
affordable product ranges, which families
can purchase as part of preparing and
cooking healthy and inexpensive meals.
One example is Homepride Pasta Bake
cooking sauces. By adding a jar of
Homepride Tomato & Herb Pasta Bake to
some vegetables and pasta, households
can prepare an inexpensive and tasty
meal which the family can enjoy. As with
many of our product ranges, this product
also benefits from being made with no
added sugar.

Less eating out and
more eating at home
Impact
Consumers are looking for more ideas
of meals to cook at home which are
both affordable and nutritious.

Our response
We launched our ‘Best Restaurant in
Town’ marketing campaign this year,
which provides consumers with a range
of low-cost meal ideas for preparing and
cooking at home.

Inspired by the desire to recreate
affordable, restaurant style meals in your
home, the ‘Best Restaurant in Town’
promotes delicious and easy-to-prepare
dishes using our brands, such as
Ambrosia Meringue and Strawberry
Mess and Sharwood’s Sweet Potato
and Chickpea Tikka Masala.

Health and
nutrition
Impact
Consumers are increasingly seeking
better-for-you options in their diet.
This may encompass food and meal
choices that are lower in one or more of
fat, salt, sugar or calories.

Our response
Health and Nutrition is a leading
consumer trend for us and, therefore,
one which is pivotal in guiding the type of
new products we bring to market.

This year, we launched a range of Mr
Kipling ‘Deliciously Good’ cakes and
pies, classified as non-HFSS (non-high in
fat, salt and sugar). These new products
are healthier and tasty versions of the
Group’s biggest brand and are made
using real fruit and up to ten times the
amount of fibre. Available in a number
of variants, this range was three years in
the making and has proved popular with
consumers.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Trend

Convenience and
convenient meal
solutions

Impact
Consumers live increasingly busy lives,
and additionally, cooking from scratch,
often using a multitude of ingredients, is
less commonplace than might have been
the case a generation ago. Accordingly,
consumers are increasingly looking for
assistance when preparing and cooking
delicious meals at home, especially
during the middle of the week.

Our response
Convenience is therefore another key
consumer trend we incorporate when
formulating our innovation programme.
To fit with this trend, this year, we
launched an updated range of Batchelors
‘Chef’s Special’ Pasta ‘n’ Sauce which
provides consumers with a convenient
and quick way to enjoy a tasty pasta
dish, with contemporary flavours such
as Creamy Four Cheese and Caramelised
Onion and Smoky Bacon.

Premium and
indulgence

Driven by
There continues to be demand for more
premium and indulgent products from
consumers. This remains the case despite
the backdrop of the well documented
cost of living crisis and a clear trend from
consumers to eat more healthily.

Our response
We continue to build premium and
indulgent products into our innovation
plans, as when consumers are seeking
a treat, they’re looking for exceptional
taste to warrant the indulgent nature of
the eating occasion.

This year, we launched an exciting and
indulgent range of Mr Kipling Gooey
Brownie Bites which not only represent a
more premium proposition relative to the
popular core Mr Kipling range, but also
assist those consumers keen to focus on
portion control with the bite size nature
of the product.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOur strategy

Our growth strategy is based on 5 strategic pillars to deliver
sustainable long-term growth, fund investment behind our brands
and provide value for our stakeholders. While we will continue to
grow our core UK business, we also focus on a number of areas which
we believe have the ability to accelerate our growth.

CONTINUE TO GROW

The UK core

SUPPLY CHAIN

Investment

EXPAND UK INTO

New categories

What this means
We invest in our operational infrastructure
to increase efficiencies across our
manufacturing and logistics operations,
facilitate growth through our innovation
strategy and enhance the safety and
working conditions of our colleagues.

Strategy in action
In FY22/23, examples of major capital
investment included the installation of
auto-casepackers and auto-palletisers
in our Sweet Treats manufacturing sites.
These projects, at our Carlton and Stoke
sites, have been successful in improving
efficiencies, realising lower costs per unit
and delivering attractive financial paybacks.

Through improving underlying margins,
these projects provide funds for re-
investment in our brands, such as digital
and TV advertising. In turn, this brand
investment delivers the platform for us to
deliver further brand growth.

Future priorities
In FY23/24, we plan to further increase
our levels of capital investment.

We have a number of projects in our
capital investment pipeline which have
attractive payback returns.

These cover a wide variety of projects and
include a range of efficiency improvement
initiatives across our operational sites, the
objective of which is to drive gross margin
improvement to enable further brand
investment.

Link to KPIs
• Free cash flow

What this means
Leveraging the strength of our brands
and our proven branded growth model
by launching into new, adjacent product
categories.

Strategy in action
Ambrosia is one of our largest and
most loved brands; it is the leader in
the ambient desserts category and
synonymous with creaminess from Devon.

In FY22/23, we launched a new range of
Ambrosia porridge pots in a ready-to-eat
format that can be enjoyed hot or cold.
This represents our first entry into the
breakfast eating occasion and leverages
the creaminess attributes which Ambrosia
is well known for. The range is available
in three varieties - original, raspberry and
golden syrup flavour.

During the year, Ambrosia porridge pots
have significantly increased market share
in the growing porridge pots market.
Consumers enjoy the creamy texture of
the product, which results in a strong
repeat purchase rate.

Future priorities
We are planning to expand the Ambrosia
porridge pots range with some exciting
new flavour variants, to build on the initial
success we have delivered in FY22/23.

Link to KPIs
• Revenue
• Trading profit

What this means
A vibrant and growing UK business
provides the foundation for broader
expansion.

Strategy in action
The branded growth model which we
employ in the UK is at the heart of
what we do and is core to our success.
Leveraging our leading category positions,
we launch new products to market linked
to key consumer trends, supported by
sustained levels of marketing investment
and delivered through strong customer/
retailer partnerships.

Over the past three years, our branded
revenue in the UK has grown by an
average of 5.3%.

One of our key focus areas is to launch
new product ranges which provide
consumers with more healthy and
nutritious options to incorporate into
their diet. Some examples of ranges we
have launched in the last year include
Mr Kipling Deliciously Good cakes,
Sharwood’s 60% less fat Poppodoms
and Plantastic Millionaire Flapjacks.
Over recent years, we have consistently
supported six of our major brands through
digital and TV advertising. This year, we
also extended our ‘Best Restaurant in
Town’ campaign to mainstream media.
Delivering sustained levels of brand
investment is key to maintaining and
increasing brand awareness, while our
advertising continues to focus on building
emotional connections with consumers.

Future priorities
We will continue to invest in building
awareness of our major brands in
FY23/24. Innovation plans for next year
include Mr Kipling Deliciously Good loaf
cakes, Cadbury mint and orange Mini
Rolls, Loyd Grossman stir-in Sauces and
Batchelors cook with Noodles.

Link to KPIs
• Revenue
• Trading profit

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023BUILD INTERNATIONAL BUSINESSES

With critical mass

INORGANIC

Opportunities

What this means
Building sustainable overseas business
units with critical mass, applying and
tailoring our brand building capabilities.
The brands we are focusing on to deliver
this growth are Mr Kipling, Sharwood’s
and The Spice Tailor

Strategy in action
Our strategy is to accelerate our growth
by utilising some of the proven branded
growth model approaches used in the
UK and applying them to focus overseas
markets such as Australia. We have
progressively built the Mr Kipling and
Cadbury cake brands in Australia through
new product launches and fostering
collaborative partnerships with retail
customers. During the year, Mr Kipling
Lemon Bakewell tarts have been a particular
success and we increased our market share
in cake to an all-time high of 15.6%.

Overall, our international business
delivered revenue growth of 10% in the
year (on a constant currency basis), as
we increased sales in all our strategic
markets.

Future priorities
We will continue to apply our proven
branded growth model to our focus
brands and markets, through launching
new products, investing in our brands and
executing strongly in-store. We’re looking
forward to expanding our distribution of
Mr Kipling cakes in the US and growing
Sharwood’s and The Spice Tailor in
Canada and Europe.

Link to KPIs
• International revenue

What this means
Expanding our product portfolio through
acquisitions and applying our brand
building and commercial expertise to
accelerate value creation.

Strategy in action
In July 2022, we announced our first
acquisition for 15 years, The Spice Tailor,
the premium, authentic, Indian and South
East Asian meal kits and accompaniments
brand.

This business is highly complementary
to our Sharwood’s and Loyd Grossman
brands and presents a strong geographical
fit with our existing footprint, with
presence in the UK, Australian, Canadian
and Irish markets. The Spice Tailor has
demonstrated a strong growth profile
in recent years, and by integrating it
into our business, we expect to deliver
further growth through leveraging our
well established and proven branded
growth model.

Future priorities
We will continue to explore modest
and targeted opportunities with the
objective of accelerating the growth
profile of the Group, while ensuring close
alignment with current consumer trends.
In this respect, The Spice Tailor is a good
blueprint of the type of brands we may be
interested in investigating more closely.

Link to KPIs
• Revenue
• Trading profit

Premier Foods plc
www.premierfoods.co.uk

OVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSStrategy in action

STRATEGY IN ACTION

Build international
businesses with critical mass
Our international strategy is to deliver
sustainable top line growth, with the
potential to grow significantly ahead of the
core UK business.

Our small dedicated Australian teams has
developed strong relationships with the
two key Australian retailers, Coles and
Woolworths.

Market share progression for Mr Kipling in
Australia over the last five years.

19.4%

Household penetration, +161 basis points
(bps) versus prior year

The initial focus in Australia was on
seasonal lines for the Christmas period
and then adding additional variants from
the UK portfolio as the business expanded.
The product range is tailored to the
Australian market which, to date, has been
driven primarily by Mr Kipling Slices, and
then extended into a range of other variants
including French Fancies and Bakewells.
We also have the opportunity to expand
further through launching a range of New
Product Development (NPD) that has
proven successful in the UK.

The international business helps to leverage
our existing UK manufacturing base, utilising
existing capacity or increasing capacity as
market growth expands.

We plan to replicate the proven approach
in Australia to other markets, such as the
USA, where we have recently completed a
successful test at over 200 retail stores.

We aim to achieve critical mass within
a selected number of focused overseas
markets. Our initial focus is on targeting
three of our key brands (Mr Kipling,
Sharwood’s and The Spice Tailor, following
our acquisition of the brand during the year)
where we have a distinctive and consumer-
relevant proposition.

Growing our business in Australia
Our approach can be demonstrated through
the success we have had building our cake
business in Australia over the last five
years. This has seen retail sales value grow
from A$10m in FY17/18 to over A$30m at
the end of FY22/23. Mr Kipling is now the
leading branded cake brand in Australia
with 10.2% market share.

We apply our successful branded growth
model strategy to our international
focus areas.

The process starts with careful consumer
research to validate and tailor our
proposition to the specific market.

We create brand awareness and trial
through a range of marketing tools
including, digital, PR and shopper marketing
activation. As we build brand awareness
and grow sales, we can then support them
through TV and digital advertising.

We invest in small, high-calibre in-market
sales teams, working both directly with
customers and via distributors to establish
distribution. The size of the team and
investment can then be increased as the
number of customers and the scale of
the business grows.

FY22/23FY21/22FY20/21FY19/20FY18/1910.2%8.8%8.6%6.8%4.1%+25%

Revenue growth year-on-year

Revenue is on a pro forma basis, reflecting
that The Spice Tailor was acquired part way
through the financial year.

STRATEGY IN ACTION

Inorganic
opportunities
Another way we can accelerate growth
is through targeted acquisitions.

The Spice Tailor acquisition
We announced the acquisition of The Spice
Tailor in July 2022, representing our first
acquisition for over 15 years.

The Spice Tailor is a premium brand in the
authentic Indian and Southeast Asian meal
kit market and is popular with consumers
who enjoy scratch cooking and appreciate
the strong authentic taste profiles the
products deliver.

The Spice Tailor is a high growth brand
which has delivered +20% compound
annual growth rate between 2017 and 2021,
and we believe can deliver strong sales and
profit growth over the coming years.

The brand is closely aligned to current
consumer trends including convenient home
cooking, premiumisation and authenticity,
and is highly complementary to the Group’s
Sharwood’s and Loyd Grossman brands.
There is also a strong geographical fit with
our existing footprint, with a presence in the
UK, Australian, Canadian and Irish markets.

Over the course of the year, we have
successfully integrated The Spice Tailor
into the Group’s Cooking Sauces &
Accompaniments category team.

We are now applying our branded growth
model to unlock the brand’s potential.
The Spice Tailor will benefit from increased
levels of marketing investment to drive
product awareness and household
penetration, additional new product
development resources, and access to the
Group’s commercial capabilities and strong
retailer relationships both in the UK and in
international markets.

In addition, The Spice Tailor provides
additional scale in our international
markets, particularly in Australia where it is
already well established, and complements
our existing focus on the Sharwood’s brand.
This has allowed us to engage in strategic
development planning with major Australian
customers in respect of the Indian cooking
sauces category for the first time. As a
result, The Spice Tailor has become a focus
brand for the international business, in
addition to Mr Kipling and Sharwood’s.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSChair’s statement

Since the business returned to the FTSE 250, we have continued to make
significant strategic progress against all five pillars of our growth strategy.
This has been achieved while further strengthening our financial position
on the back of strong trading, lower Net debt and interest costs and, most
recently, improvements to the funding position of the Group’s pension schemes.

This report covers FY22/23, the financial
year for the 52 weeks ending 1 April 2023.

The Group’s revenue reached £1,006.4m,
an increase of +11.8% versus the prior year.
Trading profit 1 grew +11.5% to £157.5m
versus last year, and profit before tax grew
+9.6% to £112.4m, year-on-year. Having
made our first acquisition in 15 years, we
have continued to reduce our Net debt.

External climate
Like many manufacturers and retailers
operating in the current geopolitical
environment, we have continued to manage
the supply chain disruption seen over the
past year. Thanks to effective processes, and
the hard work of our teams, our business
remains resilient in the face of this.

We have continued to see significant levels
of input cost inflation, across our entire
supply chain, which we have mitigated, as
far as practicable, through an active hedging
strategy and cost-saving programme. By
working collaboratively, with both our retail
partners and our broad supplier base, we
have sought to minimise the price increases
we have passed onto our customers.

To help our consumers, against the impact
of inflation, we developed a marketing
campaign, entitled ‘The Best Restaurant in
Town’, offering a range of nutritious and
good value meals to make at home, using
our broad range of products.

We have also been keen to recognise
and support the enormous efforts of
our manufacturing colleagues, taking
the decision to provide two cost of living
payments during the financial year.

Financial position
The Group’s refinancing, at the end of
financial year 2021, strengthened our
balance sheet, allowing the business to
reinvest behind its brands, operations and
its people. Alongside this, the business has
continued to demonstrate the success of
our branded growth model, driving a strong
and consistent trading performance, cash
generation and debt reduction, which has
enabled us to drive further progress through
our five pillar growth strategy.

We have made further progress, following
the segregated merger of the Group’s legacy
pension schemes in 2020. This is illustrated
by the improved financial position of the
schemes, confirmed by the recent triennial
actuarial valuation, and the resulting
reduction in deficit payments. Further
information on the triennial valuation is set
out on page 52.

During the year, we have continued to
manage successfully the free cash flow
generated by the business, enabling us to
reduce Net debt to below FY21/22 levels
at £274.3m, after taking into account the
£43.8m acquisition of The Spice Tailor. As
at the year end, Net debt/adjusted EBITDA1
was 1.5x. We remain committed to paying
a progressive final dividend each year
and, therefore, I am pleased to confirm
that, subject to shareholder approval, the
directors have proposed a final dividend
of 1.44 pence per share for the 52 weeks
ended 1 April 2023, a +20% increase on
prior year.

Board priorities and
shareholder feedback
As a Board, we remain committed to
supporting the management team to deliver
our growth strategy, the success of which is
being demonstrated by progress this year
against all five pillars: building the UK core;
supply chain investment; expanding into
new UK categories; building scale in our
existing international businesses and, where
suitable opportunities arise, investing in
further suitable bolt-on acquisitions. The
management team continues to identify
opportunities to take the business to the
next stage of growth, across each of these
pillars, and so deliver further value for our
shareholders.

The business has made good progress
against its Enriching Life Plan and its
ambitions to create more nutritious,
sustainable food for our consumers;
contribute towards a healthier planet; and
help to enrich the lives of our colleagues
and communities. Further details can
be found in our ESG section. We have
demonstrated our commitment to this as
a Board, by continuing to link part of our
executive remuneration to key targets
within the ESG strategy.

The Group has continued to advance its
Inclusion and Diversity strategy during
the year. One of our key areas of focus
is achieving gender balance for senior
management, and this year 47% of general
management roles and 40% of senior
management roles are held by females,
demonstrating progress on last year.
Information on the work being done to
address diversity across the business can be
found on page 15.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Since the business returned to the FTSE 250, we have continued to make
significant strategic progress against all five pillars of our growth strategy,
including acquiring our first business in 15 years, while further strengthening
our financial position. We are now well positioned to develop and grow the
business, taking it to the next stage of growth.”

The Board remains committed to improving
its gender and ethnic diversity. Although we
have met the current requirements, set by
the Hampton-Alexander and Parker Reviews
respectively, following the release of the
new FTSE Women Leaders Review targets,
we are working towards the new objectives
prior to the target date of 2025. Details
on this can be found in the Nomination
Committee report.

Members of the Board and I have continued
to engage with shareholders, over the
course of the year, allowing us to understand
your priorities and listen to feedback,
and bring this insight into wider Board
discussions. We look forward to continuing
this dialogue over the coming year, as we
maintain our focus on growing the business
to deliver further shareholder returns.

Governance and the Board
At the start of the financial year, we
welcomed Roisin Donnelly to the Board, as an
independent non-executive director, bringing
with her over 30 years’ FMCG marketing and
brand building experience. At our Annual
General Meeting (AGM) last year, Pam Powell
retired after nine years as an independent
non-executive director. I would like to thank
her once again for her valuable contribution
during that time.

In May 2022, following the reduction in the
shareholding position of funds managed by
Oasis Management Company Limited, Daniel
Wosner announced he would be stepping
down from the Board. I’d like to take this
opportunity to thank him for the important
and supportive contribution to the

Company’s strategic thinking, during which
time the Group made substantial progress.

Over the year, we also made changes to
our committee memberships, including the
appointment of Helen Jones to the role of
Remuneration Committee Chair, following
our AGM in July. Further details on this can be
found in the governance section of this report.

Summary
I’m pleased to be able to report on another
year of strong financial and strategic
progress for the Group and I would like to
take this opportunity to thank our investors,
colleagues, suppliers, customers and
consumers for their continued support.

Looking forward, we have a clear growth
strategy, and a management team focused
on delivering strong results, which should
enable us to capitalise on the wide range
of opportunities we see ahead. This is
underpinned by our strengthened financial
position, supporting our objective of value
creation, for all our stakeholders.

Colin Day
Chair

18 May 2023

1 Statutory measures include seven months’ ownership

of The Spice Tailor for FY22/23. Trading profit is
stated including software amortisation and FY21/22
comparatives have been updated accordingly.
A definition of Alternative Performance Measures
and a reconciliation between headline and statutory
measures is provided in the appendices on pages
53 to 55.

+9.6%

Increase in profit before tax

1.44p

20% increase to final dividend

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSChief Executive’s review

Over the past four years, our business has made enormous progress, and
this year we have delivered another excellent set of results. Our portfolio
of iconic brands has once again performed strongly, as we reached £1bn
of sales and our grocery brands continued to increase their market share.

Thanks to the combination of our strong
portfolio of brands, our collaborative
customer partnerships, and the expertise
we have across Premier Foods, we have
continued to deliver strong growth. Group
revenue increased 11.8%, underpinned by
our branded growth model and supported
by higher pricing, while Trading profit1
and adjusted PBT1 were 11.5% and 13.0%
ahead of the prior year. We successfully
maintained our trading profit margin in
the face of significant input cost pressures,
achieving this through a combination
of productivity improvements, cost
efficiencies, and pricing.

A key driver of success this year has been
the resilience of our brands and the breadth
of our portfolio. We know how challenging
the past year has been for many consumers,
and our products have always played a
key role for families when finances are
tight and budgets are squeezed. Many of
our Grocery brands in particular serve as
“meal-makers”, which help people bring
ingredients together to create nutritious
and affordable meals. We recognise the
current environment is difficult for many
of our consumers, and so we have done
everything we can to keep prices as low as
possible, raising prices only as a last resort.

We also developed a campaign called
the ‘Best Restaurant in Town’ to provide
extra help and inspiration to consumers,
sharing low-cost, nutritious recipe ideas
with millions of people through a new
website and major marketing campaigns.
We are continuing to see people look for
convenient, affordable and tasty meal
solutions, and this has been reflected in
the particularly strong performance of
Batchelors and Nissin this year.

Continued success of our
branded growth model
Our ability to deliver this strong
performance is the result of our branded
growth model – the combination of our
leading brands, consumer insight driven new
product innovation, sustained marketing
investment and strong retailer partnerships.

This year we have once again continued to
invest in our brands, bringing a series of new
consumer-focused products to market, and
supporting our major brands with TV and
digital marketing campaigns.

We have made our business successful by
listening to the needs of our consumers
and developing products that meet those
changing needs. More and more, consumers
tell us that health and healthier eating
are important to them, and so health
continues to be a priority for new product
development as well as an important part of
our ESG strategy.

A major breakthrough this year was the
launch of our Deliciously Good range of
Mr Kipling cakes. The range contains 30%
less sugar, while also being lower in fat
and containing higher levels of fibre and
real fruit. This is the only comprehensive
range of branded, non-HFSS2 cakes on the
market, demonstrating the strength of our
innovation capabilities.

We continued to build strong retail
partnerships, working together to drive
overall category growth, and to create
impactful promotional activity in-store. This
year we have been particularly successful
with a series of brand partnerships including
with Warner Bros and NBC Universal,
creating major in-store events themed
around the Minions and the new DC movie
Shazam. These events feature highly
impactful product displays, highlighting our
brands to existing and new consumers and
driving incremental sales.

Delivery against all five pillars
of our growth strategy
We have continued to deliver against our
growth strategy and I’m very pleased with
the strong progress we have made across
each of the pillars.

The first pillar of our strategy is to grow our
core UK business, which is by far our largest
market. This year we have seen revenue
growth of 11.3% in the UK, and over the
past three years, the compound annual
growth rate for our brands in the UK is 5.3%
(excluding The Spice Tailor).

As a result of our consistent strong free
cash flow, we have continued to invest
in our manufacturing infrastructure.
Doing this helps to drive cost efficiencies,
which we can then reinvest back into our
brands to drive further growth. This has
included bringing in an automated case-
packer at our Stoke site and a new auto
palletiser for our Mr Kipling French Fancies
manufacturing line.

The third part of our strategy is to expand
into new categories where we see
opportunities to generate further value.
I am really encouraged by the successes
we are seeing in this area. Sales from
new categories increased by 33% this
year, thanks partly to our new Ambrosia
porridge pots which take the business into
breakfast, a meal where none of our other
brands feature, and so delivering totally
incremental revenues.

Our international business has once again
had a strong year of growth, and is now
46% bigger than when we implemented the
current strategy in 2020. This year’s growth
was broad based across our focus markets
of Ireland, Australia, New Zealand, the
USA, Canada and Europe, with Australian
cake the standout performer, growing both
market share and household penetration
and with Mr Kipling extending its market
leadership position.

Finally, an important milestone this year was
our first acquisition in over 15 years, the
purchase of The Spice Tailor, a premium and
authentic Indian and Southeast Asian meal
kits brand. This is a high growth brand, which
is already benefiting from the application
of our branded growth model, with sales
growth accelerating to 25% over the last
year. We see great potential to scale up the
brand as we continue to build distribution
in both the UK and overseas markets, bring
new products to market and support with
new marketing activities.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Building on the strong financial performance and strategic progress
we have achieved this year, we see major opportunities to expand
the business in the coming year and over the medium-term, creating
further value for all our stakeholders.”

Strong financial position
enabling reinvestment
Our performance and growth continue to be
underpinned by our completely transformed
financial position. The benefits of the
refinancing which completed in 2021 have
been particularly important as the UK entered
a higher interest rate environment this year.

Leverage has further reduced to 1.5x
adjusted EBITDA and is now in line with our
medium-term target, with the acquisition of
The Spice Tailor in August 2022 having been
funded from one year’s free cash flow.

We are also starting to see the expected
benefits of the transformational pensions
agreement we reached in 2020. The latest
triennial valuation at 31 March 2022,
reported a net combined actuarial surplus
of £297m. Following this, the Net Present
Value of future pension contributions to
the end of the respective recovery periods
has reduced by approximately 50%, from
£240-260m to approximately £125m. As a
result, the company’s cash costs in deficit
payments and administrative costs will now
reduce by £6m from FY23/24.

Our focus on financial discipline puts the
business in a strong position for the future,
enabling us to continue to invest in our
brands, our people, and our manufacturing
sites, whilst paying a progressive dividend.

Closure of Knighton
Having considered a range of options,
this year we took the difficult decision
to close our factory in Knighton. The site
produces predominantly low-margin, non-
branded powdered beverages for third
party customers, and does not fit with the
Group’s growth strategy, which is focused
on building our portfolio of leading brands.

The site is unprofitable and therefore the
closure will be accretive to our Trading
profit over the medium-term.

Our Enriching Life Plan
We are now into the second year of our
Enriching Life Plan and continue to make
good progress on our commitments. It is
encouraging to see the work we are doing
recognised by leading ESG benchmarking
platforms, as well as by policy groups
and organisations such as the Carbon
Disclosure Project.

The launch of the Mr Kipling Deliciously
Good range has been an important step
towards our health targets. We have seen
sales of our plant-based products increase
by 34%, while also launching new plant-
based products under our Plantastic brand,
including Millionaire Flapjacks, Protein Pots
and Creamy Pasta Sauces.

We have also taken steps forward
on our planet commitments. Having
published our full GHG targets last year,
our decarbonisation targets have been
submitted to, and approved by, the Science
Based Targets initiative (SBTi), and we have
mapped out our Scope 3 supplier base.
We have also established energy councils
across our sites to drive energy efficiency
and reduce emissions, helping to reduce
our Scope 1 and 2 emissions, (net market
based), by 10% since FY20/21.

Meanwhile, we continue to support our
people and the communities we serve.
A major part of this is our new five-year
FareShare partnership. We have also taken
further steps forward in our Inclusion and
Diversity journey, and also made progress
on skills development in the industry, as we
welcomed our first T-levels students and

became early adopters of the Food and
Drink Federation’s career passport.

With rising prices creating pressure for
many families, it was important to us to
provide extra support for our colleagues
where possible, including two additional
cost of living payments during the year.

In summary
As we enter a new financial year, we carry with
us the significant momentum we have built in
recent years. While the macro environment
remains challenging, we continue to navigate
this successfully, leveraging our leading
brands, which have demonstrated their
resilience and showed once again the key role
that they play for families.

I’d also like to take the opportunity to thank
every colleague who has gone out of their
way to deliver such great performance over
the past year.

Building on the strong financial performance
and significant strategic progress we have
achieved this year, we continue to see major
opportunities across the five pillars of our
growth strategy to expand the business in
both the coming year and over the medium-
term, delivering further value creation for all
our stakeholders.

Alex Whitehouse
Chief Executive Officer

18 May 2023

1 Statutory measures include seven months’ ownership

of The Spice Tailor for FY22/23. Trading profit is
stated including software amortisation and FY21/22
comparatives have been restated accordingly. A
definition of alternative performance measures and
a reconciliation between headline and statutory
measures is provided in the appendices on pages 53
and 55.

2 Non-HFSS: Food or drinks not high in fat, salt or sugar.

+11.8%

Increase in Group revenue

+10%

Increase in international sales
(on a constant currency basis and excluding
The Spice Tailor)

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSThe Enriching Life Plan:
our purpose in action

As one of the UK’s leading food producers and home to some of the
nation’s most loved and iconic brands, we have both an opportunity and a
responsibility to forge a healthier future for our planet and everyone on it.

Our sustainability strategy, known as our
Enriching Life Plan, encompasses everything
we touch, from the products we make
to the ingredients we source and the
communities we operate in.

With our purpose, enriching life through
food, at its heart, the plan highlights our
commitment to a more sustainable food
system and, in turn, the UN Sustainable
Development Goals. Guiding our work
to 2030, it sets out our ambitions to
make more nutritious and sustainable
food, contribute to a healthier planet
and nourish the lives of our colleagues
and communities.

Working in Partnership
In order to help shape a more sustainable
UK food system, we are members of many
industry-leading groups which facilitate
collaboration and accelerate action. By
participating in these initiatives, we hold
ourselves accountable against industry-wide
targets and strive to contribute to wider
change. Where we feel we have a unique
contribution to make across the broader
industry we engage more, with colleagues
currently holding steering group positions
on the UK Plastics Pact, The Courtauld
Commitment 2030 programme and The
Food Data Transparency Partnership.

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* RSPO use of logo: License number: 4-0019-06-100-00.

Check our progress at https://rspo.org/members/103/ Premier-Foods- Group-Limited

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

Headline targets*

Our Products

Our Planet

Our People

More than double sales of products that
meet high nutritional standards

Develop validated Science-based Targets
aligned with Business Ambition for 1.5°C

Achieve gender balance in our senior
leadership team

More than 50% of our products (by
Stock Keeping Unit (SKU)) will provide
additional health or nutrition benefits

Reduce scope 1 and 2 emissions by 67%
by 2030 and achieve net zero by 2040;
and reduce scope 3 emissions by 25% by
2030 and target net zero by 2050

Provide skills programmes and work
opportunities for excluded groups to
enable fulfilling careers in the Food Industry

Grow sales of plant-based products
to £250m per annum

Deforestation and conversion free across
entire supply chain

Provide the equivalent of 1 million meals
per annum to those in food poverty

100% of our packaging will be reusable,
recyclable or compostable by 2025

Halve our food waste and support our
suppliers and consumers to do the same
(against a 2017 baseline)

Be more of a force for good in our
communities by volunteering at least
1,000 colleague days a year

* All targets are 2030 from a 2020 baseline unless otherwise stated. For more information on all targets see our Enriching Life Plan disclosure tables from page 178.

Baked-in behaviours

Excelling in
food quality

Being
safe

Sourcing
with care

Marketing
responsibly

Protecting the
environment

Doing the
right thing

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOur approach: placing our purpose
at the heart of our business

Environmental, social and governance (ESG) issues are constantly evolving
and our strategy is responsive to this, dealing with both changing and
emerging threats. As businesses, policy makers, non-governmental
organisations, scientists and citizens understand the issues better, new
international and national policies, and voluntary and industry frameworks
are being developed to help drive action.

Our Enriching Life Plan builds on the findings
of our most recent materiality assessment,
which considers the views of a broad range
of stakeholders to identify and prioritise
the issues most relevant to our business
and where they should be addressed in our
Enriching Life Plan (see graphic).

We will formally repeat our materiality
assessment in 2025/26 as we reach the
halfway point of our Enriching Life Plan
but to ensure our work continues to adapt
to emerging and developing topics we
continually review our priorities.

The last year has seen an increasing number
of examples of extreme weather, drought
and geopolitical upheaval around the
world. The issues of human rights, water
stewardship and the ongoing response
to climate change have led to increased
prominence of the roles civil society and
businesses need to play to address these
challenges in the future.

Materiality assessment

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Ingredient / product
traceability
& integrity

Deforestation

Climate change

Sustainable
proteins &
plant-based
diets

Healthy
diets

Sustainable
packaging
& the circular
economy

Biodiversity

Sustainable
agriculture

Supply chain,
human rights
& modern day
slavery

Reducing
food waste

Sharing &
applying
nutrition
knowledge

Employee
engagement,
diversity &
inclusion

Labour
practices

Product quality
and safety

Food poverty

Well-being

Prospering
communities

Employee
health & safety

Biodiverse
agriculture

Talent &
development

Stakeholder
responsiveness

Sugar,
salt & fats

Sustainability
added value

Marketing,
communication
& labelling
practices

Water &
wastewater
management

Waste &
hazardous
materials
management

Local food
systems

Business ethics

Less significant

Business impact

More significant

Our Products

Our People

Our Planet

Our Baked-in behaviours

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

Our governance
We believe everyone at Premier Foods
plays a part in delivering our Enriching Life
Plan. ESG sits at all levels of our business.
Our Board has oversight of our strategy and
our Enterprise Risk Management Processes
ensure oversight of climate-related and
other ESG risks (such as TCFD, biodiversity,
deforestation, water and human rights).

Accountability for the delivery of our plan
rests with our Executive Leadership Team
(ELT) and our Steering Groups which report
into our ESG Governance Committee,
chaired by our CEO. The committee is
made up of members of the ELT, who have
responsibility for ensuring our Enriching Life

Plan is embedded into how we do business,
sponsoring steering groups which are led
by members of our Senior Leadership
Team (SLT). Our CEO and CFO both have
the delivery of specific ESG targets in
their remuneration. See the Directors’
Remuneration Report for more information.

Our disclosure and
reporting approach
Holding ourselves accountable against our
targets is essential. We publish progress
against our Enriching Life Plan annually
and details can be found in our Enriching
Life Plan disclosure tables from page 178.
We remain committed to sharing our
data and progress with industry platforms

such as the UK Plastics Pact, Courtauld
Commitment 2030, Champions 12.3 and
the Carbon Disclosure Project (CDP). This
year, we are also reporting against the SASB
(Sustainability Accounting Standards Board)
disclosure framework for the Food and
Beverage sector which can be found on our
website.

We are committed to accurate and
transparent reporting. For the first time we
have sought independent limited assurance
procedures over selected FY22/23
performance indicators. For the details and
results of these assurance procedures, see
our Enriching Life Plan disclosure tables.

Delivery of
Enriching Life Plan

Embedding climate-related
and other ESG risks

Board

Executive Leadership Team

ESG Governance Committee

Audit Committee

Product Pillar
Marketing SLT

Planet Pillar
Steering Group

People Pillar
Steering Group

Compliance,
Data, Reporting
& Disclosure

Product

SBTi validation/
decarbonisation

I&D culture

CDRD

Packaging

Climate change scope 1&2

Well-being culture

Climate change scope 3

Community volunteering

Reducing waste

Community food poverty

Protecting our
natural resources

Development

Enterprise Risk Management

TCFD Steering Group

Delivery of Enriching Life Plan
Oversight of climate-related and
other ESG risks

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOur Products
Making nutritious and
sustainable food

The product pillar of our Enriching Life Plan is dedicated to helping
consumers lead healthier and more sustainable lifestyles by creating
foods that are rich in nutrients, kinder to the environment and free
of unnecessary or problematic packaging.

What’s at stake?
The Health Survey for England in 2021
estimated that nearly 26% of adults are
obese with a further 38% overweight
and research from the British Nutrition
Foundation shows that only 1% of the
population follows a healthy, balanced diet.

The EAT-Lancet Commission advocates for a
shift towards healthier and more plant-based
foods to address the needs of a growing
population in a world of finite resources.

In 2020, 12 million tonnes of packaging was
placed on the market in the UK. Packaging

plays a key role in the food industry and
prevents food waste by delivering products
to consumers safely. However, if poorly
designed, excessively used, or irresponsibly
disposed of, it can lead to a range of
environmental and social issues.

Our ambitions

Making
nutritious and
sustainable
food

Our ambitions, targets and progress

Our 2030 targets

Our progress

Make great-tasting,
healthier and more
nutritious food

More than double sales of products that
meet high nutritional standards.

More than 50% of our products (by
stock keeping unit) provide additional
health or nutrition benefits.

The company’s branded sales of foods
scoring less than 4, and drinks scoring
less than 1, on the UK Department of
Health’s Nutrient Profiling Model has
grown by 17%.

The proportion of products with a health
or nutritional benefit has increased from
40% to 43%.

Support the
nation’s shift
towards plant-
based diets

Reduce the
environmental
impact of our
packaging

£250m sales in plant-based products
made to a vegan recipe.

The sales of plant-based products have
grown by 34%.

Each core range has a plant-based
offering.

Plant-based recipes have been launched
for Sharwood’s poppadoms and prawn
crackers, Super Noodles, and Mr Kipling
tarts and pies.

100% of packaging to be reusable,
recyclable or compostable by 2025.

96% of all our packaging and 82% of our
plastics packaging is now recyclable.

Reduce carbon impact of our packaging
by 25% in line with our SBTi targets.

* See our Enriching Life Plan disclosure tables from page 178 for more information

30
30

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023CASE STUDY

Mr Kipling Deliciously Good cakes and pies

Our new Mr Kipling Deliciously Good cakes
and fruit pies were launched in spring
2022, an innovation which delivers on
our target of more than doubling sales
of products meeting high nutritional
standards. A UK first for the category, the
Deliciously Good range not only scores
less than 4 on the Nutrient Profiling Model

used by the UK government, containing
less sugar, saturated fats and salt, but
importantly delivers more fruit and
great flavours for shoppers. This culinary
breakthrough is a fantastic example of
our expert development chefs pushing
boundaries and innovating to create even
healthier versions of consumers’ favourites.

Our contribution
Keeping our consumers at the heart of
everything we do, we strive to democratise
nutritious, affordable food and nudge
consumers towards healthier and more
sustainable diets.

• Over the last year we have launched or

reformulated 207 products which support
high nutritional standards and 172
products which offer an additional health
and/or nutrition benefit.

• All of our top selling stock and gravy

products have a 25% reduced salt option
and a wide range of them also now offer
a plant-based alternative.

• While we have increased our range of

cooking sauces offering one of your 5 a
day, we have also enhanced fibre levels
where possible.

• In traditional HFSS food categories

(classified as high in fat, sugar or salt),
we successfully developed and launched
non-HFSS alternatives, for example,
Sharwood’s poppadoms and prawn
crackers.

• We launched six new foodservice products

with increased vegetables in our Sharwood’s
and Homepride brands, supporting schools
in preparing healthier and more sustainable
meals. These products are fortified with

vitamins C and D, while also providing a
‘source of’ or ‘high in’ fibre.

• We offer vegan-approved non-HFSS
Indian Tikka and Korma variants.

• All single servings of cake and pudding
products now meet the Government
calorie cap, as set out in their sugar
reduction programme’s guidelines.

We believe it is important to collaborate
with others to have a broader impact.
In order to support an increase of fibre
in the UK diet we have launched 30 new
products with fibre content in line with
criteria set out in the UK nutrition claim
register, contributing to the Food and Drink
Federation’s ‘Action on Fibre’ initiative.
We have also collaborated with retailers
and others in the industry as part of the
Consumer Goods Forum to share our
experiences of developing and promoting
healthier products.

Harnessing the power of our trusted
brands, we are supporting our consumers
who choose to transition towards more
plant-based diets, by setting ourselves
a target for each core range to offer a
meat-free version. We have also recently
launched exciting new options under our
Plantastic brand.

We are continually working towards
removing artificial colours and flavours from
our brands and we do not add non-naturally
occurring trans fats to our products. We also
have a policy that we won’t use Genetically
Modified Organisms in our products.

Packaging plays a vital role in delivering
products safely to consumers, but we also
recognise the need to reduce its social and
environmental impact. We are a founding
member of the UK Plastics Pact and have
a place on the steering group for the
programme to help drive action across the
industry. Supporting a circular economy,
currently 96% of all our packaging and 82%
of our plastics packaging is recyclable. We
are also working to include more recycled
content to reduce the need for virgin
materials. All of our packaging will continue
to carry OPRL (On Pack Recycling Labels)
to help our consumers understand where
they can recycle it and we will engage with
industry and Government to help ensure
the planned reforms to household recycling
systems in the UK lead to increased recycling
rates and reduced littering.

CASE STUDY

Supporting plant-based diets
Families and individuals eating meat-free
main meals have increased by 33% in the
last five years and with this trend set to
continue we want to support consumers
who wish to consume more plant-
based products in their diets. We have
therefore launched and reformulated
80 plant-based products through the
year. Exciting new products from our

Plantastic brand include Plantastic
Protein Boost pots and Creamy Pasta
sauces, which are also a source of
protein and fibre, as well as being one
of your 5 a day. We are also helping
shoppers create nutritious meat-free
versions of popular meals with Paxo
meat-free Meatball and Burger mixes
and meat-free gravy recipes from Bisto.

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Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTS

Our Planet
Contributing to a
healthier planet

With strengthened commitments on tackling
climate change and deforestation, improving the
sustainability of farming practices and reducing waste,
the planet pillar of our Enriching Life Plan contributes to
a healthier planet by nurturing the natural resources that
we rely on to make our food.

What’s at stake?
“Climate change is the defining issue of our
time, and we are at a crucial moment. From
shifting weather patterns that threaten food
production, to rising sea levels and rainfall
that increase the risk of catastrophic flooding,
the impacts of climate change are global in
scope and unprecedented in scale” (United
Nations). Around 30% of greenhouse gas
emissions globally are attributable to the
food system – encompassing agriculture
and land use, processing and transport,
through to consumption and food waste.
The food industry has a major role to play in
helping the food system transition to a more
sustainable, resilient future.

Our contribution
Our plan recognises the environmental
impact of our operations and our wider
supply chain. We have stepped up our actions
limiting the effects of climate change and
we are developing our resilience to climate
change (see TCFD statement). We want to do
more to protect natural resources through
our supply chain and we are strengthening
our efforts in tackling food waste.

We understand the need to act quickly and
transform our ways of working and have
answered the call from the United Nations
to the business community to set bold
and ambitious targets, joining ‘Business
Ambition for 1.5C°’. We have validated
our 2030 decarbonisation targets with the
Science-Based Targets initiative and through
the year we have established site energy

councils to drive the reduction in energy
usage and carbon emissions in our sites. We
continue to support the transition to clean
electricity, strengthening our target to use
solely renewable electricity by 2030, and
embarking on our own transition developing
investments for new generation capacity.

With a complex supply chain and operations,
we have built on our first full greenhouse
gas (GHG) footprint to identify our most
important ingredients based on scale and
carbon impact. As part of our work to drive
the decarbonisation of our products, we
have mapped the carbon commitments
of our suppliers in these key sectors and
also carried out a study into their resilience
to the impacts of climate change. This is
shaping developments in our procurement
strategies. We are also disclosing, for the first
time, our scope 3 emissions by category. We
have sought independent limited assurance
procedures over scope 1 and scope 2 location
based GHG emissions for FY22/23. For
the details and results of these assurance
procedures, see page 178 in our Enriching
Life Plan disclosure tables.

We recognise that we all need to protect the
natural resources on which we depend. We
are therefore tackling deforestation in the
products we source which carry the greatest
risks: palm, soy, beef, pulp and cocoa. We
continue our work with the Roundtable on
Sustainable Palm Oil (RSPO) and the Round
Table on Responsible Soy (RTRS) to drive
supply of sustainable commodities and are

moving to Rainforest Alliance certification for
our direct sourced cocoa. Closer to home,
we’re committed to regenerative agriculture
where it can help us reduce the carbon
emissions associated with the ingredients we
use, improve their resilience to climate change
and help protect natural resources which are
at risk. To support this work, we have joined
the Sustainable Agriculture Initiative (SAI) and
The UK Water Roadmap, which is helping us
to better understand the evolving science and
to collaborate with other businesses.

Our sites have sent zero waste to landfill
since 2016 and, as signatories to the
Food Waste Reduction Roadmap and
Champions 12.3, we have long worked on
reducing food waste in our operations.
This year has seen the development of a
new partnership with FareShare (see Our
People). As part of this collaborative action,
we have identified further opportunities at
our sites for the reduction of food waste in
our processes. Where we do have waste,
we have identified new routes for the
redistribution of food which is fit for human
consumption and have also started working
with a new contractor who is helping us
to divert waste not suitable for human
consumption to animal feed. In order to
support the reduction of food waste in the
homes of consumers, we launched a new
on-pack activity and website, helping raise
awareness of the issues of food waste and
giving practical recipe ideas for some of the
most common leftovers.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Our ambitions

Contributing
to a healthier
planet

Our ambitions, targets and progress

Our 2030 targets

Our progress

Taking action on
climate change

Develop validated Science-Based
Targets aligned to ‘Business
Ambition for 1.5°C’.

Reduce scope 1 and 2 emissions by
67% and target net zero by 2040.

Reduce scope 3 emissions by 25%
and target net zero by 2050.

Protecting our
natural resources

Deforestation free and conversion
free palm and beef supply chains by
2025, and across entire supply chain
by 2030.

Champion regenerative agricultural
practices for key ingredients.

Our targets have been validated by the
Science-Based Targets initiative and we have
strengthened our targets for the adoption of
renewable electricity.

Total energy usage reduced by around 6%
against prior year and scope 1 and 2 market
based emissions have reduced by 10% since
2020/21.

Have mapped the carbon impact of all key
suppliers and are developing plans to support
their decarbonisation.

100% certified direct palm and soy and
adopting Rainforest Alliance certified cocoa
for direct purchases.

Carried out climate change risk assessment
on key commodities and sourcing regions to
help prioritise our future sourcing practices.

Joined the Sustainable Agriculture Initiative
and UK Water Roadmap.

Carried out training for key teams on the
principles of regenerative agriculture.

Mapped all key suppliers to understand their
adoption of regenerative practices.

Reducing waste
across our value
chain

Halve our food waste and support
our suppliers to do the same.

Food waste in our own operations reduced by
11%. Mapped the targets of our key suppliers.

Make better use of food waste we do
generate and redistribute 750 tonnes
for human consumption each year.

Use the strength of our brands to
engage consumers, to reduce food
waste in the home.

Launched two major on-pack activities to
raise awareness of the issues of food waste
and food poverty. Help raise funds for
FareShare and provide recipe ideas to reduce
food waste in the home.

* See our Enriching Life Plan disclosure tables from page 178 for more information

CASE STUDY

A Fresh Take on Food Waste
In September we launched our ‘Fresh
Take on Food Waste’ campaign.
Following work with WRAP to identify
the most wasted foods in UK homes,
we launched a website to help raise
awareness of the issues of food waste
and to give recipe ideas for people
to use leftovers to make delicious,
nutritious and affordable meals for

all the family. Links to the website
appeared on over three million packs
of our Loyd Grossman, Homepride
and Sharwood’s cooking sauces and
we worked with our retail partners to
promote the initiative in-store, online,
in retailer magazines and other trade
media. The website was visited over
7,000 times.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOur People
Nourishing the lives of our
colleagues and communities

Within our people pillar we are building the culture, skills and
capabilities needed to help our business, the UK food sector and
wider economy thrive in the future and give back to the communities
where we operate.

What’s at stake?
With a footprint in every region in the UK,
the food and drink manufacturing industry
employs nearly half a million people, and
offers a wide range of opportunities for
colleagues to build a fulfilling career. And,
as inclusive teams make better business
decisions 86% of the time and twice as fast,
delivering 60% better results (Social Mobility
Commission), everyone stands to benefit
when we value and support talent with
different backgrounds and identities coming
into our business.

But disparities are increasing, and the cost
of living crisis is felt across our communities
with food poverty on the rise, as shown by
the latest Food Foundation’s Food Insecurity
Index. As a food manufacturer, we have a

responsibility to support and nourish the lives
of our colleagues, our consumers and our
communities.

Our contribution
We want our colleagues to thrive at work and
aim for Premier Foods to be a place where
everyone is welcome, feeling they can bring
their true, authentic self to work every day.
We are working towards becoming even
more inclusive across the entire organisation,
including bringing gender balance to senior
leadership roles, through the introduction of
a new sponsorship programme for diverse
talent, as well as the continuation of our
well-established mentoring programmes.
This year, we ran two online recruitment
campaigns for key roles to increase the
applications from women, which contributed

to an increase in female applicants from 36%
to 41%. We also ran our #oktobeme diversity
data survey for the second time to gain a
better insight into the diversity of our teams,
and saw a significant increase in the number
of colleagues agreeing to take part in the
survey, going from a 48% to a 76% response
rate. We are developing tools to help our
leaders to better understand and reflect the
diversity of the communities in which we
operate. Our Inclusion and Diversity (I&D)
Ambassadors network continues to educate
all colleagues, partnering with Stonewall,
Trans in the City, Menopause Experts and
Diversity in Grocery, which we were proud
to sponsor again this year (for more see our
values and culture section).

CASE STUDY

Championing thriving careers in the food industry
We’re constantly looking out for
opportunities to promote careers in
the food industry. We are proud to
work closely with Technicians.org and
Gatsby Charitable Foundation who are
dedicated to increasing the awareness
of technician roles, and technical
education pathways for 11–16-year-
olds and their parents and teachers.

This year, as part of our National
Apprenticeship week celebrations,
four of our apprentice technicians
produced videos for the Gatsby
Foundation where they talked
about their roles and experiences
at Premier Foods.

We were also delighted to welcome
our first two T-level students for
placements with our IT teams as
part of their Digital Support Services
course. We’re proud to have been
early adopters of the Food and Drink
Careers Passport, a new industry
initiative which boosts the food and
drink industry’s image as an attractive
and worthwhile place to work.

34
34

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023To support colleagues with their mental
and physical well-being, we carried out
wide-ranging assessments this year to
help us better understand the health of
our colleagues at two sites. Supported by
Vitality, the organisation behind Britain’s
Healthiest Workplaces accreditations,
we are pleased to have received Bronze
accreditation for those sites. The pilot will
now be extended to include three more
sites over the next 12 months.

Our long-running apprentice and graduate
programmes provide fantastic career
development opportunities while helping
us attract new talent and grow our existing
colleagues. These programmes also play
a critical role in addressing the skills gap
faced by our industry, particularly in Science,
Technology, Engineering and Mathematics
(STEM) based roles. Our newly recruited
Early Careers Advisor is developing
partnerships with local schools and colleges

to raise awareness of the opportunities in the
industry, including those more likely to be
from groups who wouldn’t traditionally have
considered a career in a food company. When
we welcome colleagues into our business
– no matter at what level – our Learning
and Development programmes help them
develop the confidence and skills to move up
the career ladder. We’re encouraging more of
our colleagues to develop their careers into
STEM roles and have mapped out the various
opportunities which fit within this category
to better signpost our colleagues.

We operate from 15 offices and sites
across the country, endeavouring to be
a caring partner for our colleagues and
our local communities. We aim to be a
force for good and volunteer our time and
expertise to local causes linked to the issues
of food poverty, employability and local
environmental quality.

As a food manufacturer, we have an
opportunity to help tackle the increasing
issue of food poverty and in the past
year have launched an innovative new
five-year partnership with FareShare UK.
This encompasses the reduction of food
waste at our sites, increased redistribution
of surplus stock, partnership campaigns with
our retailers to amplify the charity’s message
and ambitions, and colleague engagement
and fundraising. We provided the equivalent
of 726,530 meals to support FareShare and
other poverty relief charities. Our colleagues
gave 270 days of volunteering and 96% of
those asked said they had a much better
understanding of the issues faced by our
communities as a result.

In response to global disasters, and building
on the donation we made last year to the
British Red Cross Ukraine Humanitarian
appeal, we have contributed £50,000 to their
Disaster Relief Fund.

Our ambitions, targets and progress

Our ambitions

Our 2030 targets

Our progress

A diverse,
healthy and
inclusive culture

A leading
developer
of people

A caring
community
partner

Gender balance for senior management.

46.9% of general management roles and 40.4% of
senior management roles are held by females.
Both increased from last year.

Diversity KPIs to reflect regional demographics.

Internal diversity data capture increase from 48% to 76%.

All sites achieve platinum level Health and Wellbeing
accreditation.

Piloted programme at two sites achieving bronze
accreditation at both.

Provide skills programmes and work opportunities
for the young and excluded groups.

Apprenticeship and graduate programmes continue.
We’ve supported 191 apprenticeships since 2017.

75% of STEM vacancies filled by internal candidates.

80% of colleagues feel they have opportunity to
develop and grow.

Provide the equivalent of 1 million meals per year to
those in food poverty.

Introduced new T-level placements with first students
joining our IT team. 47 of our apprentices are currently
in a STEM role.

Training academies being developed for each area of
the business and now in place in Sales, Marketing,
Finance and Procurement.

Major new partnership with Fareshare. The equivalent of
726,530 meals donated to FareShare and other poverty
relief charities.

Be more of a force for good in our communities by
volunteering at least 1,000 colleague days each year.

New volunteering policy launched – 270 days volunteered
by our colleagues to charities and good causes.

* See our Enriching Life Plan disclosure tables from page 178 for more information

CASE STUDY

Our ‘Win a Dinner, Give a Dinner’ campaign was
back, bigger and better for its second edition!
Collaborating with our retail and
charity partner to contribute to our
shared ambition to fight hunger and
tackle food waste, our ‘Win a Dinner,
Give a Dinner’ on-pack promotion
is an example of our ambitious
community work. The activation ran
exclusively in Tesco stores across 10
million products, with the aim of

donating the equivalent of 350,000
meals to our charity partner FareShare.
The campaign gave away £10 Tesco
vouchers for shoppers to buy a dinner
for their family. For every ‘dinner’
claimed by a shopper we matched this
with a £10 donation to FareShare and
winners also had the choice to donate
their £10 prize to FareShare.

It was supported by in-store and
online media activity as well as a
Tesco and Premier Foods first, a fully-
branded end of aisle promotional
feature in more than 580 stores
throughout January, February,
and March. Importantly, it raised
awareness of FareShare’s work to
tackle food waste and food poverty.

Premier Foods plc
www.premierfoods.co.uk

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOur baked-in behaviours

We are passionate about running our business in the right way and
we have a strong set of principles to help us do that. We call them our
baked-in behaviours.

As one of the UK’s largest food producers
with millions of consumers who enjoy
our products, we are always working to
ensure the quality and safety of the food
we make. Our focus on safety extends to
our colleagues and those in our supply
chain, ensuring we source with care and
from those who share our values. As part
of our efforts to support healthier and
more sustainable diets, we market our
products responsibly to help consumers
with their choices. While we drive
forward our work on decarbonisation and

global environmental issues, we never
lose sight of our obligations to protect
local environments around our sites.
Underpinning our approach to all of these
issues, is our commitment to do the right
thing, in the right way.

To be clear about what we stand for in
these areas and what we expect from our
colleagues, suppliers and partners, we
have a range of policies which we regularly
review to ensure they reflect our drive for
continuous improvement. Like the rest of

our Enriching Life Plan, we link our policies,
standards and technical procedures to
leading industry and international standards
and agreements where possible.

Many of these policies are publicly available
and this year we’ve increased disclosure
on our performance and progress on a
broader range of key issues by adopting
the Food and Beverage sector guidance
from the Sustainable Accounting Standards
Board (SASB). See our website for more
information.

Our baked-in
behaviours
Responsible business practices

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Baked-in
behaviour

Our policies
and standards

Our progress

Excelling in
food quality

• Food safety and
authenticity
policies
• GMO policy

• All sites awarded grade A or AA+ by BRC, or specific customer standards.
• 61,085 tests at Premier Analytical Services covering food quality and authenticity.
• Updated policies on food authenticity and food safety.
• Founding member of Food Industry Intelligence Network (FIIN).
• Food safety information included in new report following the Sustainable Accounting

Standards Board (SASB) Processed Foods standard on our website.
www.premierfoods.co.uk/Investors/Results-Centre/2022-2023.aspx

Being safe

Sourcing
with care

• Health and
Safety policy

• 100% of our sites accredited to ISO 45001.
• The Board reviews health and safety performance at every scheduled Board meeting.
• Lost Time Accidents (‘LTA’) rate of 0.14 per 100,000 hours worked.
• Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (‘RIDDOR’) rate
of 0.09 per 100,000 hours worked, significantly better than the industry average (0.55).

• Internal hazards and risks identification programmes ‘Be Safe’ and ‘Total Observation

Process’ (TOP) remain internal priorities and include additional Health & Safety training
to all colleagues.

• Modern slavery

• 97% of our direct spend on ingredients, packing and packaging is with Sedex

policy and
statements
• Ethical trading

policy

• Animal welfare

policies

registered suppliers.

• 69 physical audits completed over the last year at supplier sites.
• 5 Sedex Members Ethical Trade Audits (SMETA) conducted in the last year.
• Updated Ethical Trading policy.
• Tier 1 Business Benchmark for Farmed Animal Welfare.
• Moved to Rain Forest Alliance Cocoa.
• Increased information included in new report following the Sustainable Accounting

Standards Board (SASB) Processed Foods standard on our website.

• Nutrition labelling
• Marketing to

children

• All our UK portfolio are labelled using the voluntary front-of-pack traffic light labelling
scheme. 91.8% carry all five key pieces of nutrition data for energy, fat, saturates,
sugars, salt with the remaining 8.2% carrying just the energy information due to
space restrictions on the packaging.

• Policy to not market to children under 16.

Marketing
responsibly

Protecting
the
environment

Doing the
right thing

• Environmental

policy

• Zero waste
to landfill

• 100% of our sites are accredited to ISO 14001.
• Updated environmental policy along with palm, soy and packaging policies.
• Zero waste to landfill.
• Where present, hazardous waste is segregated on site and properly disposed of or
treated by our waste contractors, as controlled under dedicated work procedures.

• Code of conduct
• Anti-bribery and
corruption policy
• Colleague welfare

and human
rights policies

• Political

involvement policy

• Training rolled out to colleagues on GDPR, sanctions, anti-bribery and corruption,

competition and corporate criminal offence.

• 49 employee feedback forums ‘Premier Voice’ meetings held.
• Training to targeted Procurement and HR colleagues on human rights in partnership

with Future Food Movement.

• Updated policies on Whistleblowing and money-laundering.
• New political Involvement policy.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSTask Force on Climate-related
Financial Disclosures

Introduction and Compliance Statement

We recognise that climate change is one
of the most pressing issues facing society,
and our collective response over the next
decade will determine how broad and
deep the impacts of climate change will
be. That’s why we must continue to work
collaboratively to make a greater positive
impact. We see it as both a responsibility
and an opportunity, to which we are
committed to playing our part.

Our Enriching Life Plan lays out a bold set of
targets, including our response to climate
change; ensuring we play our role in the
transition to a net zero future and how we
can better prepare our business to adapt to
the impacts of climate change.

In 2022, we made our first Task force on
Climate-related Financial Disclosures (TCFD)
statement, which explained our approach
to the management of climate-related
risks. This year we have strengthened

our disclosures and consider it to be
consistent with the listing requirements
of LR9.8.6(8), save for the full disclosure
of metrics and targets we use to assess
climate-related risks and opportunities.
These are partially disclosed as they are still
under development as we strengthen our
approaches to managing climate-related
risks. The overall status of our work against
the listing requirements is laid out in the
table below.

Governance

Consistency

Status

1. Describe the Board’s oversight of

climate-related risks and opportunities.

2. Describe the management’s role in

assessing and managing climate-related
risks and opportunities.

Aligned, we have disclosed our approach
to Board oversight and management’s
role in assessing climate-related risks.

Strategy

Consistency

Status

3. Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long term.

4. Describe the impact of climate-related risks
and opportunities on the organisation’s
businesses, strategy, and financial planning.

5. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.

Aligned, we have assessed the most
important risks of climate change
identified through our risk assessment
processes and disclosed the findings. We
have disclosed where these risks impact
our business strategy. We have modelled
the financial impact of the physical risks
associated with the sourcing of key
ingredients and changes in demand for
our products against a range of climate
scenarios. Where relevant we have
included the impacts in our financial
reporting. We will continue to monitor
and develop our understanding of these
and other emerging risks and updates
will be included in future disclosures.

Consistency

Not consistent

Partially consistent

Consistent

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Risk Management

Consistency

Status

6. Describe the organisation’s processes
for identifying and assessing climate-
related risks.

7. Describe the organisation’s processes for

managing climate-related risks.

8. Describe how processes for identifying,

assessing and managing climate-related risks
are integrated into the organisation’s overall
risk management.

Aligned, we have disclosed how
climate-related risks and opportunities
are identified, assessed and managed
through our Enterprise Risk Management
process.

Metrics and Targets

Consistency

Status

9. Disclose the metrics used by the organisation

to assess climate-related risks and
opportunities in line with strategy and risk
management process.

10. Disclose scope 1, scope 2 and, if appropriate,
scope 3 greenhouse gas (GHG) emissions,
and the related risks.

11. Describe the targets used by the

organisation to manage climate-related
risks and opportunities and performance
against targets.

Partial alignment. We disclose our full
scope 1, 2 and appropriate scope 3
greenhouse gas emissions. We disclose
the metrics and targets we currently have
to guide our other actions. Following our
more detailed risk modelling work, we
are refining the metrics and targets we
will use to manage the risks associated
with the operational resilience of our
sites and the impact of climate change on
the availability of key commodities. These
will be published in our next disclosure.

Governance
The Board has overall accountability for our
ESG strategy, the Enriching Life Plan, and
climate-related risks. The Board receives
presentations twice a year on the business’
progress on our Enriching Life Plan and
receives updates in the form of dashboard
reports on key performance and projects
every time they meet. These updates
include progress on the adoption of the
recommendations of the Task Force for
Climate-related Financial Disclosures.

Members of the Board have experience
from several consumer goods and retail
companies, and Government departments
with strong track records on climate
change and sustainability. Colin Day, the
Chair of our Board is a board member at

the Department for the Environment and
Rural Affairs (DEFRA), chairing the DEFRA
Audit and Risk Assurance Committee. Helen
Jones is also the chair of the Sustainability
Committee at Halfords plc and Roisin
Donnelly is a member of the Sustainable
Business Committee at NatWest Group plc.

Climate risks are reviewed by the Audit
Committee as part of the risk management
process conducted twice a year, and
subsequently presented to the Board.
Climate risks and ESG matters have also
been embedded into the annual review and
approval of the Group’s five-year strategic
plan and budget approval process, and are
taken into account by the Board when making
key decisions as part of its responsibility to
consider matters under Section 172 of the
Companies Act. An example of this is the
assessment of the future options for our
Knighton plant and the investments required
to bring it up to the standards needed to
meet our Enriching Life Plan targets.

The governance structure (see next page)
ensures that climate-related and other ESG
risks are embedded into the Company’s
Enterprise Risk Management processes
which are reviewed by the Board’s Audit
Committee. A TCFD steering group has been
established under the leadership of the CFO,
to support the adoption of the framework.
The steering group ensures climate-related
risks are properly included in our Enterprise
Risk Management process and directly
updates the Board’s Audit Committee. The
adoption of the requirements of TCFD forms
part of the remuneration of the CFO.

Day-to-day responsibility for managing
climate-related, and other ESG, risks
is delegated to our ESG Governance
Committee. Our ESG Governance
Committee is chaired by our CEO and made
up of relevant members of the Executive
Leadership Team (ELT), including the CFO
and Corporate Affairs and ESG director.
The group meets six times a year and is

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSTask Force on Climate-related
Financial Disclosures

CLIMATE-REL ATED DISCLOSURES | CONTINUED

responsible for managing all ESG risks. The
ESG Governance Committee also includes
our ESG director and subject matter experts
from across the business. Actions taken
by the Group during the year include the
review of climate-related risks and this TCFD
statement, approval of our submission for
validation of our decarbonisation targets to
the Science-Based Targets initiative (SBTi),
a review of learnings from the impacts

of the extreme weather experienced in
the summer of 2022, the approval of our
new renewable electricity sourcing policy,
reviewing the outputs from our new site
energy committees and the approval of
key decisions in our procurement strategy
to increase the sourcing of commodities
from certified environmental and social
schemes. During the year we held an
externally facilitated training session on

‘climate-related risk and disclosure’ for the
TCFD steering group. A number of our key
colleagues involved in risk management and
areas identified with specific climate-related
risks also attended this training session.

→ See the Risk management section for

more information on our Enterprise Risk
Management process.

Delivery of
Enriching Life Plan

Embedding climate-related
and other ESG risks

Board

Executive Leadership Team

ESG Governance Committee

Audit Committee

Product Pillar
Marketing SLT

Planet Pillar
Steering Group

People Pillar
Steering Group

Compliance,
Data, Reporting
& Disclosure

Product

SBTi validation/
decarbonisation

I&D culture

CDRD

Packaging

Climate change scope 1&2

Well-being culture

Climate change scope 3

Community volunteering

Reducing waste

Community food poverty

Protecting our
natural resources

Development

Enterprise Risk Management

TCFD Steering Group

Delivery of Enriching Life Plan
Oversight of climate-related and
other ESG risks

change. We will therefore need to prepare
our business for a range of physical and
transitional effects of climate change,
both locally and internationally, which will
represent both risks and opportunities for
the organisation over the short, medium
and long term.

We have carried out a number of risk
identification workshops with colleagues
from across our business which have
identified a number of different risks and
opportunities as a result of climate change.
In response to the requirements of TCFD,
we have prioritised these risks by likelihood
and impact, dividing climate risk into two
broad categories – physical risk relating
to extreme weather events and long-term
chronic shifts in global temperatures and
precipitation levels, and transition risk
relating to changes in regulation, pricing,
consumer and customer demand changes
and reputational damage. Over the last

two years, we have worked with external
agencies to accelerate our understanding of
these risks to our business. As part of this
process, we have conducted climate risk
training and workshops with key business
functions including our sales, marketing,
procurement and finance teams. Engaging
key stakeholders, these workshops involved
building our knowledge of climate-
related issues to project future risks and
opportunities. The output culminated in
the identification of six key physical and
transition risks and opportunities which
had the largest potential impact on our
business strategy. Further assessment was
carried out to develop our understanding
of the risks. To support this analysis
three scenarios were considered and are
summarised in the following table.

Strategy
We are proud to manufacture the majority
of our products in our own dedicated
factories across the UK, serving a number
of commercial channels through a range
of different routes to market. These local
operations mean we can expect our own
business to be affected by the physical and
transitional impacts of climate change in the
UK. As a food manufacturer, our business
relies on a wide range of raw materials,
ingredients and packaging items and, while
much of this is locally sourced, there are
a number of complex international supply
chains. These international supply chains,
along with our commercial expansion
into new markets, mean we will also be
impacted by the global effects of climate

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Early Policy Action:
Smooth Transition

Late Policy Action:
Disruptive Transition

No Policy Action:
Business as Usual

There is early decisive action within
society to reduce global emissions,
as well as coordinated policy action
towards a low carbon economy. The
outcome of this scenario is action
sufficient to limit global warming to
well below 2°C, aligned to the Paris
Agreement.

There is a delay in implementing the
policy response required to reduce
global emissions. The outcome of this
scenario is action sufficient to limit
global warming to around 2°C.

This scenario highlights the global
impact of a failure by governments to
introduce policy interventions to limit
global emissions. Under this scenario
we see global temperatures increase
to above a 3-4°C level of warming.

Physical Climate Change
Pathway*
RCP2.6

Physical Climate Change
Pathway*
RCP8.5

Policy landscape**
Delivery of stated UK Government policy
landscape in UK in the next 5-10 years.

Policy landscape**
Delivery of stated UK Government policy
landscape in UK in the next 5 -10 years.

Policy landscape**
Delivery of stated UK Government
policy landscape in the next five years.

Strengthened, but well-planned,
policies for industrial and agricultural
decarbonisation from 2028 onwards.

Commercial and
consumer landscape
The Science-Based Targets initiative
is widely adopted by our customers
and they encourage suppliers to
make progress using commercial
arrangements.

More severe policy response from
around 2033, to compensate for
delayed action.

Commercial and
consumer landscape
The Science-Based Targets initiative
is widely adopted by our customers
and they encourage suppliers to
make progress using commercial
arrangements.

Consumers increasingly seek out
products with sound environmental
credentials. Credible product information
is available to support consumer choices.

Consumers increasingly seek out
products with sound environmental
credentials. Some product information is
available to support consumer choices.

Disjointed and ineffective policy
response from around 2033.

Commercial and
consumer landscape
The Science-Based Targets initiative
is adopted by many of our customers
and they encourage suppliers to make
progress using commercial arrangements
but divergence in approach.

Consumers increasingly seek out
products with sound environmental
credentials. Some product information is
available to support consumer choices.

* Representative concentration pathway as laid out by the International Panel on Climate Change (IPCC).
** While the business is impacted by EU and local legislation, the UK policy framework is most important given the significance of the UK market

in our revenues and as the location of much of our manufacturing base.

Risk assessment was carried out as follows;

• Modelling of the physical risks associated
with the availability of key ingredients
covered 10 key ingredients accounting
for 54% of purchased ingredients by
spend and included those with the most
reliance on specific sourcing regions. This
analysis considered the impact of climate
change over the next 20 years.

• Modelling of the commercial risks

associated with changing consumer

behaviours covered all our current
product sales in the UK over the next
30 years.

• The assessment of transition risks

covered the next 10 years based on the
uncertainty associated with long-term
future policy frameworks.

In all scenarios and for all risks, specific
consideration was given to the next five
years as it is the period covered in our
business strategy cycle and therefore

key financial planning, statements and
disclosures. To align with our enterprise risk
management and materiality processes,
risks were assessed to determine whether
they reached the criteria of a potential
risk of greater than £5m in any year in the
period of the business strategy cycle.

The outcomes of this analysis, along
with our mitigating actions and our
overall resilience are summarised in the
following table.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTS

Task Force on Climate-related
Financial Disclosures

CLIMATE-REL ATED DISCLOSURES | CONTINUED

Physical Risks

Key physical risks

Unmitigated risk

Time horizon

Next 5
years

6-10
years

More than
10 years

Supply chain

investment

Next 5
years

6-10
years

More than
10 years

Supply chain

investment

The most significant risk to our sites comes from
flooding as a result of intense localised rainfall.
Our Lifton site was previously identified as being at
risk of flooding from a river bordering the site but
investments have already been made to mitigate
this risk. The extreme weather experienced during
the summer in 2022 helped us identify processes
and infrastructure which will be increasingly
vulnerable to higher localised rainfall and higher
temperatures. In some circumstances these
necessitated temporary changes to working
practices in order to maintain production.

We have already seen some supply challenges in
summer 2022, as a result of the extreme weather
experienced in several supply regions. This has
been a contributing factor to price inflation across
the food industry and has necessitated working
with a wider range of suppliers to meet product
demand and in some cases, contributed to an
increase in pricing of products.

Our analysis of our eight largest commodities by
volume and two key ingredients with a known
limited supply region, shows that many would expect
to see an increase in long-term yields as a result of
physical impacts of climate change, however, we
have identified one commodity with a local yield risk
in the short-term and three commodities with local
yield risks in the medium to long-term which we will
address through our procurement strategies.

Unmitigated risk

Time horizon

In all climate scenarios, we assume increases in the
pricing of electricity and gas. This is driven by many
factors including, but not limited to, the policies
adopted by governments to address climate
change. This will impact our own energy prices
and also that of suppliers, who will likely seek to
recover some of those costs.

Next 5
years

6-10
years

More than
10 years

Supply chain

investment

Disruption to our
operations as a result
of acute extreme
weather events.

Changes in the availability,
price or quality of key
ingredients, as a result of
more extreme weather
events or chronic changes
in climate in sourcing
regions.

Transition Risks

Key transition risks
Key physical risks

Financial impact of
increasing energy costs
and carbon pricing.

In all scenarios we do not deem this

mitigated risk reaches the threshold for

materiality in the period covered in our

business strategy cycle.

In all scenarios we do not deem this

mitigated risk reaches the threshold for

materiality in the period covered in our

business strategy cycle.

Protecting key infrastructure

Investments in flood protection were made at

Lifton in 2021 and a review of drainage is being

carried out at our Worksop site. Following a review,

all sites have strengthened their site extreme

weather protocols, including local site investments

to improve local resilience. We have developed

our arrangements with insurance partners to

reduce and mitigate financial risk in the event

of future issues.

Supplier collaboration and R&D

We have developed a quantitative yield impact

tool with a third party which we will monitor

regularly. We are working closely with suppliers

of those commodities identified as at a yield risk

to understand their resilience and mitigation

plans. These include sourcing key commodities

from other regions, and in some cases product

reformulation to broaden the range of ingredients

we can use in our products. We seek to minimise

the cost of these actions although in some cases

it may be necessary to include price increases

in our commercial strategy. Our programmes to

improve ingredients’ yields and reduce food waste

in our own operations will also contribute to our

resilience. We are developing new metrics and

targets to guide this work.

Energy efficiency, low carbon electricity

and procurement models

We have invested in metering equipment to better

understand electricity usage, and have developed

site energy councils to drive short and long-term

efficiency and decarbonisation plans. Our business

strategy cycle includes investment in low carbon

electricity generation on our sites, and we have a

range of procurement mechanisms to reduce the

risks associated with energy pricing.

In all scenarios we do not deem this

mitigated risk reaches the threshold for

materiality in the period covered in our

business strategy cycle.

Time Horizon Key

Smooth transition

Disruptive transition

Business as usual

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Addressed in our
business strategy

Mitigating actions as part
of our strategic planning

Outcome

Next 5

years

6-10

years

More than

10 years

Supply chain
investment

Next 5

years

6-10

years

More than

10 years

Supply chain
investment

Disruption to our

operations as a result

of acute extreme

weather events.

Changes in the availability,

price or quality of key

ingredients, as a result of

more extreme weather

events or chronic changes

in climate in sourcing

regions.

The most significant risk to our sites comes from

flooding as a result of intense localised rainfall.

Our Lifton site was previously identified as being at

risk of flooding from a river bordering the site but

investments have already been made to mitigate

this risk. The extreme weather experienced during

the summer in 2022 helped us identify processes

and infrastructure which will be increasingly

vulnerable to higher localised rainfall and higher

temperatures. In some circumstances these

necessitated temporary changes to working

practices in order to maintain production.

We have already seen some supply challenges in

summer 2022, as a result of the extreme weather

experienced in several supply regions. This has

been a contributing factor to price inflation across

the food industry and has necessitated working

with a wider range of suppliers to meet product

demand and in some cases, contributed to an

increase in pricing of products.

Our analysis of our eight largest commodities by

volume and two key ingredients with a known

limited supply region, shows that many would expect

to see an increase in long-term yields as a result of

physical impacts of climate change, however, we

have identified one commodity with a local yield risk

in the short-term and three commodities with local

yield risks in the medium to long-term which we will

address through our procurement strategies.

In all scenarios we do not deem this
mitigated risk reaches the threshold for
materiality in the period covered in our
business strategy cycle.

Protecting key infrastructure
Investments in flood protection were made at
Lifton in 2021 and a review of drainage is being
carried out at our Worksop site. Following a review,
all sites have strengthened their site extreme
weather protocols, including local site investments
to improve local resilience. We have developed
our arrangements with insurance partners to
reduce and mitigate financial risk in the event
of future issues.

Supplier collaboration and R&D
We have developed a quantitative yield impact
tool with a third party which we will monitor
regularly. We are working closely with suppliers
of those commodities identified as at a yield risk
to understand their resilience and mitigation
plans. These include sourcing key commodities
from other regions, and in some cases product
reformulation to broaden the range of ingredients
we can use in our products. We seek to minimise
the cost of these actions although in some cases
it may be necessary to include price increases
in our commercial strategy. Our programmes to
improve ingredients’ yields and reduce food waste
in our own operations will also contribute to our
resilience. We are developing new metrics and
targets to guide this work.

Addressed in our
business strategy

Mitigating actions as part
of our strategic planning

Outcome

In all climate scenarios, we assume increases in the

pricing of electricity and gas. This is driven by many

Next 5

years

6-10

years

More than

10 years

Supply chain
investment

Financial impact of

increasing energy costs

and carbon pricing.

factors including, but not limited to, the policies

adopted by governments to address climate

change. This will impact our own energy prices

and also that of suppliers, who will likely seek to

recover some of those costs.

Energy efficiency, low carbon electricity
and procurement models
We have invested in metering equipment to better
understand electricity usage, and have developed
site energy councils to drive short and long-term
efficiency and decarbonisation plans. Our business
strategy cycle includes investment in low carbon
electricity generation on our sites, and we have a
range of procurement mechanisms to reduce the
risks associated with energy pricing.

In all scenarios we do not deem this
mitigated risk reaches the threshold for
materiality in the period covered in our
business strategy cycle.

→ Continue on the next page

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSTask Force on Climate-related
Financial Disclosures

CLIMATE-REL ATED DISCLOSURES | CONTINUED

Transition Risks

Key transition risks

Unmitigated risk

Time horizon

Premier Foods operates in a complex regulatory
landscape, set by governments and often influenced
by their adoption of global frameworks. Current UK
legislation is focused on disclosure and understanding
risks which, while increasing reporting obligations,
will not have material impact on our operations.
Governments do have stated policies to support
the transition to a low carbon economy, which will
encourage the adoption of new technology and
energy sources for manufacturing and transport.

Evolving legislation and
regulation could lead
to increased business
complexity and forced
changes in key business
processes.

Commercial Opportunities and Risks

Next 5
years

6-10
years

More than
10 years

Supply chain

investment

Horizon scanning on upcoming

legislation and emerging technology

We have strengthened our ESG risk assessment

and disclosure standards to prepare for upcoming

reporting requirements. Our Compliance and

Reporting working group reviews upcoming

legislation twice a year to include in our functional

plans. Our engineering team reviews emerging low

carbon technology and programmes to support

their adoption, for suitability in our applications.

In all scenarios we do not deem this

mitigated risk reaches the threshold for

materiality in the period covered in our

business strategy cycle.

Key commercial
opportunities
and risks

Changes in consumers’
demand for our products,
in the event of changing
weather patterns.

Commercial opportunities
from supporting customers’
and consumers’ demands
for more sustainable
products.

Unmitigated risk

Time horizon

Premier Foods produces, markets and distributes
a range of products that are consumed in a variety
of situations. Consumption of food and drink varies
as a result of weather and many of our products
have a seasonal demand pattern. Changes in the
climate will alter seasonal patterns and, therefore,
may change the demand for different types of
products. This represents both a risk and an
opportunity for Premier Foods, with demand for
products traditionally consumed in autumn and
winter, potentially under threat from shorter and
less severe cold weather, and products consumed in
hotter weather, potentially able to exploit increased
opportunities from longer and hotter summers.

Many of our major customers have their own
science-based targets to tackle climate change
and have developed strategies to encourage
decarbonisation and resilience in their supply
chains. These strategies could include the
rewarding of positive progress through supplier
financing terms, product listings, or collaborative
projects. There is also a risk that retailers could
penalise suppliers who are not making sufficient
progress on addressing issues in their own
products and services.

Next 5
years

6-10
years

More than
10 years

Continue to grow

in the UK core

Commercial planning and

category expansion

Next 5
years

6-10
years

More than
10 years

When considering this risk (excluding

the associated opportunities), we do

deem that this mitigated risk could

reach the threshold for materiality in

the period covered in our business

strategy cycle and it has therefore been

considered in our viability statement.

In all scenarios we do not deem this

mitigated risk reaches the threshold for

materiality in the period covered in our

business strategy cycle.

Expand UK into

new categories

Build international

businesses with

critical mass

Inorganic

opportunities

Continue to grow

in the UK core

Expand UK into

new categories

Build international

businesses with

critical mass

Inorganic

opportunities

By understanding the factors which impact

consumers’ purchasing decisions, we are well

placed to manage the risk of reduced demand for

products at specific times. Our commercial strategy

includes expansion into new categories, many of

which have different use occasions and are more

suitable for warmer weather. Recent examples

include Mr Kipling ice cream and products for meals

more common in the summer such as barbecues.

Strengthening the sustainability credentials

of our products and collaboration

Our Enriching Life Plan lays out a wide range of

ways in which we are improving the sustainability

credentials of our products. Many of these are

well aligned to the objectives of our customers.

We monitor consumer sentiment to understand

the factors which are most important in purchase

decisions and are well placed to respond to those

opportunities. One particular opportunity is

consumers’ increasing demand for plant-based

products, which is a key part of our commercial plans.

Time Horizon Key

Smooth transition

Disruptive transition

Business as usual

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Premier Foods operates in a complex regulatory

landscape, set by governments and often influenced

by their adoption of global frameworks. Current UK

legislation is focused on disclosure and understanding

risks which, while increasing reporting obligations,

will not have material impact on our operations.

Governments do have stated policies to support

the transition to a low carbon economy, which will

encourage the adoption of new technology and

energy sources for manufacturing and transport.

Evolving legislation and

regulation could lead

to increased business

complexity and forced

changes in key business

processes.

Next 5

years

6-10

years

More than

10 years

Supply chain
investment

Horizon scanning on upcoming
legislation and emerging technology
We have strengthened our ESG risk assessment
and disclosure standards to prepare for upcoming
reporting requirements. Our Compliance and
Reporting working group reviews upcoming
legislation twice a year to include in our functional
plans. Our engineering team reviews emerging low
carbon technology and programmes to support
their adoption, for suitability in our applications.

In all scenarios we do not deem this
mitigated risk reaches the threshold for
materiality in the period covered in our
business strategy cycle.

Addressed in our
business strategy

Mitigating actions as part
of our strategic planning

Outcome

Changes in consumers’

demand for our products,

in the event of changing

weather patterns.

Commercial opportunities

from supporting customers’

and consumers’ demands

for more sustainable

products.

Premier Foods produces, markets and distributes

a range of products that are consumed in a variety

of situations. Consumption of food and drink varies

as a result of weather and many of our products

have a seasonal demand pattern. Changes in the

climate will alter seasonal patterns and, therefore,

may change the demand for different types of

products. This represents both a risk and an

opportunity for Premier Foods, with demand for

products traditionally consumed in autumn and

winter, potentially under threat from shorter and

less severe cold weather, and products consumed in

hotter weather, potentially able to exploit increased

opportunities from longer and hotter summers.

Many of our major customers have their own

science-based targets to tackle climate change

and have developed strategies to encourage

decarbonisation and resilience in their supply

chains. These strategies could include the

rewarding of positive progress through supplier

financing terms, product listings, or collaborative

projects. There is also a risk that retailers could

penalise suppliers who are not making sufficient

progress on addressing issues in their own

products and services.

Next 5

years

6-10

years

More than

10 years

Next 5

years

6-10

years

More than

10 years

Addressed in our
business strategy

Mitigating actions as part
of our strategic planning

Outcome

Continue to grow
in the UK core

Expand UK into
new categories

Build international
businesses with
critical mass

Inorganic
opportunities

Continue to grow
in the UK core

Expand UK into
new categories

Build international
businesses with
critical mass

Inorganic
opportunities

Commercial planning and
category expansion
By understanding the factors which impact
consumers’ purchasing decisions, we are well
placed to manage the risk of reduced demand for
products at specific times. Our commercial strategy
includes expansion into new categories, many of
which have different use occasions and are more
suitable for warmer weather. Recent examples
include Mr Kipling ice cream and products for meals
more common in the summer such as barbecues.

When considering this risk (excluding
the associated opportunities), we do
deem that this mitigated risk could
reach the threshold for materiality in
the period covered in our business
strategy cycle and it has therefore been
considered in our viability statement.

In all scenarios we do not deem this
mitigated risk reaches the threshold for
materiality in the period covered in our
business strategy cycle.

Strengthening the sustainability credentials
of our products and collaboration
Our Enriching Life Plan lays out a wide range of
ways in which we are improving the sustainability
credentials of our products. Many of these are
well aligned to the objectives of our customers.
We monitor consumer sentiment to understand
the factors which are most important in purchase
decisions and are well placed to respond to those
opportunities. One particular opportunity is
consumers’ increasing demand for plant-based
products, which is a key part of our commercial plans.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSTask Force on Climate-related
Financial Disclosures

CLIMATE-REL ATED DISCLOSURES | CONTINUED

Risk Management
Climate-related risks are identified and
managed through our established Enterprise
Risk Management framework to identify,
assess, mitigate and monitor the key risks
we face as a business. The risk management
framework is used to inform our principal,
watch list and emerging risks. Our Internal
Audit and ESG teams work closely to update
our principal risks as they relate to climate
change and climate change is considered
as a principal risk. We have taken steps to
more formally integrate the identification
of climate-related risks into our existing
functional risk logs including training and
new templates to ensure their inclusion.

Response strategies are developed for the
key risks identified across the business.
We use these to define controls and
monitor metrics. This will ensure that
the appropriate decisions on mitigating,
transferring, accepting or controlling
the climate-related risks are made. Risk
owners from the ELT are assigned and are
responsible for embedding our response to
risk-related issues in our business strategy.

All key risks are reviewed with risk owners,
on a bi-annual basis, to assess and
understand the evolution of the risk, and
whether our current risk management
controls are sufficient. Outputs of this work
are then included in the Risk management
sections of each annual report.

→ See the Risk management section for

more information.

Metrics and Targets
Our performance reducing greenhouse
gas emissions and progress against our
science-based targets are key metrics to
help us understand our management of
climate-related risks and opportunities.
A full review of our energy consumption and
greenhouse gas emissions data in line with
the UK Government’s Streamlined Energy
and Carbon Reporting (‘SECR’) regulations
can be found on page 48. In addition, there
are a range of other key environmental and
commercial performance measures linked to
our management of climate-related risks and
opportunities which are shown in the table
below. Many of these, and other important
performance indicators, can be found in our
Enriching Life Plan disclosure tables from
page 178 and our Sustainable Accounting
Standards Board (SASB) disclosure on our
website. www.premierfoods.co.uk/Investors/
Results-Centre/2022-2023.aspx

Key physical risks

Metrics

Target (2030 unless
otherwise stated)

• Our operational performance and service levels.

(Internal measure)

• Delivery of our site
infrastructure plans.

• Climate risk score assessing exposure to

climate-related risks at our sites provided by our
insurance partner. (Internal measure)

• Target for reduction in climate
risk score at our sites under
development for update in next
statement.

• Quantitative yield forecast tool developed with

• Target for reducing exposure to

third party to understand local and global impact
of physical climate change. (Internal measure)

yield loss under development for
update in next statement.

• Our approach to champion regenerative
agricultural practices for key ingredients.
(Currently under development for update in
next statement)

• Champion regenerative

agricultural practices for key
ingredients.

• Halve our food waste and support

our suppliers to do the same.

Disruption to our
operations as a result of
acute extreme weather
events.

Changes in the availability,
price or quality of key
ingredients, as a result of
more extreme weather
events or chronic changes
in climate in sourcing
regions.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Key transition risks

Metrics

• Scope 1, 2 and 3 emissions. (Disclosed below)

• Energy usage. (Disclosed below)

Target (2030 unless
otherwise stated)

• Reduce scope 1 and 2 emissions
by 66.8% and reduce our scope 3
emissions by 25% by 2030 (against
a 2020 baseline). These targets have
been validated by the Science-Based
Targets initiative

• Net zero in our own operations by
2040 and in our total supply chain
by 2050.

Financial impact of
increasing energy costs
and carbon pricing.

Evolving legislation and
regulation could lead to
increased business complexity
and forced changes in key
business processes.

Key commercial
opportunities
and risks

Changes in consumers’
demand for our products,
in the event of changing
weather patterns.

Commercial opportunities
from supporting customers’
and consumers’ demands
for more sustainable
products.

• Packaging usage and recyclability. (Disclosed in

• Ensure 100% of our packaging is

our Enriching Life Plan disclosure tables)

• Food Waste. (Disclosed in our Enriching Life Plan

disclosure tables)

• Certification status of key commodities

addressing environmental and social risks.
(Disclosed in our Enriching Life Plan disclosure
tables)

reusable, recyclable or compostable
by 2025.

• Halve our food waste and support our

suppliers to do the same.

• Zero deforestation and conversion free
palm and meat by 2025, and across
the whole supply chain by 2030.

Metrics

Target (2030 unless
otherwise stated)

• Internal tool to assess the impact of climate

• Expand UK into new categories –

change on the consumption of products in key
categories. (Internal measure)

ongoing.

• Sales of plant-based products. (Disclosed in our

• Expand UK into new categories –

Enriching Life Plan disclosure tables)

ongoing.

• Core product category with plant-based

offerings. (Disclosed in our Enriching Life Plan
disclosure tables)

• Packaging usage and recyclability. (Disclosed in

our Enriching Life Plan disclosure tables)

• Certification status of key commodities

addressing environmental and social risks.
(Disclosed in our Enriching Life Plan disclosure
tables)

• Customer feedback and consumer insight.

(Internal measure)

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSTask Force on Climate-related
Financial Disclosures

CLIMATE-REL ATED DISCLOSURES | CONTINUED

2022/23 Streamlined Energy
and Carbon Reporting
Premier Foods’ Greenhouse Gas (GHG)
emissions are calculated and reported
based on ‘The Greenhouse Gas Protocol:
GHG Protocol: A Corporate Accounting
and Reporting Standard – Revised Edition’
(GHG Protocol) and the complementary

‘Corporate Value Chain (Scope 3) Accounting
and Reporting Standard’, setting our
boundaries to include all key requirements
and following an operational control
approach. More information can be found
in our Enriching Life Plan disclosure tables
from page 178 and in our reporting criteria
www.premierfoods.co.uk/CorporateSite/

media/documents/sustainability/Premier-
Foods-reporting-criteria-for-specified-ESG-
performance-metrics-2022-23.pdf

All of our energy use is based in the UK, we
have no manufacturing or office facilities
under our control outside of the UK and as
such, our Streamlined Energy and Carbon
data below is all UK based.

Production output and energy usage
Production output (tonnes)

Total Energy Usage (MWh)
Energy usage intensity (MWh/t)

Scope 1 and 2 Greenhouse Gas Emissions

Scope 1 Greenhouse Gas Emissions (tCO2e)

Scope 2 Greenhouse Gas Emissions – location-based (tCO2e)

Scope 2 Greenhouse Gas Emissions – market-based (tCO2e)*

Total Scope 1 & Scope 2 Greenhouse Gas Emissions – location-based (tCO2e)
Total Scope 1 & Scope 2 Greenhouse Gas Emissions intensity – location-based (gCO2e/Kg)

Total Scope 1 & Scope 2 Greenhouse Gas Emissions – market-based (tCO2e)*

Total Scope 1 & Scope 2 Greenhouse Gas Emissions intensity – market-based (gCO2e/Kg)

Scope 3 Greenhouse Gas Emissions**

Scope 3 Greenhouse Gas Emissions associated with Purchased goods and services (tCO2e)

Scope 3 Greenhouse Gas Emissions associated with Upstream transport and distribution (tCO2e)

Scope 3 Greenhouse Gas Emissions associated with Downstream transport and distribution (tCO2e)

Scope 3 Greenhouse Gas Emissions associated with Other relevant scope 3 emissions (tCO2e)***
Total Scope 3 Greenhouse Gas Emissions (tCO2e)**

2021/22

2022/23

333,260

275,577
0.83

305,449
A 259,555
0.85

37,621

18,567

227

56,188
168.6

37,848

113.6

983,117

A 36,668
A 15,081
28,961

A 51,749
169.4

65,629

214.9

807,319

34,960

6,930

56,286
905,495

Scope 2 Greenhouse Gas Emissions - market based (tCO2e) for prior year has been restated to reflect more accurate emissions data. For more information see our Enriching
Life Plan disclosure tables.

** Scope 3 Greenhouse Gas Emissions are based on 2022 calendar year and were only disclosed at a total level in prior year. The approach has been updated and the prior year

data has been restated. For more information see our Enriching Life Plan disclosure tables.

*** Includes: capital goods, fuel and energy-related activities, waste generated in operations, business travel, employee commuting, and the end-of-life treatment of sold

products (packaging). For more information see our Enriching Life Plan disclosure tables.

media/documents/sustainability/Premier-
Foods-reporting-criteria-for-specified-ESG-
performance-metrics-2022-23.pdf

Principal energy efficiency
measures taken in FY22/23
As part of our Enriching Life Plan, we have
set bold new targets to decarbonise our own
operations and support our suppliers to do the
same. Energy efficiency is a crucial element
of this plan and we have launched a ‘Smart
Energy’ programme under the leadership
of our Operations director. The programme
coordinates the organisation’s work on
energy efficiency through site energy councils
who are driving short-term behavioural and
operational improvement programmes. Our
engineering team is driving

long-term investments in new processes and
equipment. Investments in this year include
boiler upgrades, compressor renewals and
investments to improve the efficiency of
our ovens, along with a continuation of our
LED lighting programme and changes to
distribution infrastructure to facilitate more
efficient vehicle loading and utilisation.

Both energy use and associated CO2e
emissions are monitored monthly through
our internal environmental reporting and
we are improving the quality of available
information by investing in metering
equipment. This will allow us to more
clearly identify improvement opportunities
and prioritise them based on their
potential benefits.

Independent assurance
PricewaterhouseCoopers LLP (‘PwC’) has
performed an Independent Limited Assurance
engagement on selected balances within the
2022/23 data, shown with the symbol A , in
accordance with the International Standard
on Assurance Engagements 3000 (Revised)
‘Assurance Engagements other than Audits or
Reviews of Historical Financial Information’
and International Standard on Assurance
Engagements 3410 ‘Assurance engagements
on greenhouse gas statements’, issued by
the International Auditing and Assurance
Standards Board. The Independent
Limited Assurance Report can be found at
www.premierfoods.co.uk/SpecialPages/
ESG-Disclosure-Assurance-Report. Our
Methodology Statement – the basis on which
the KPIs are calculated and on which the
limited assurance is given - can be found at
www.premierfoods.co.uk/CorporateSite/

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

Operating and financial review

Once again, the business has delivered a year of strong performance in
a challenging environment with Group revenue increasing by 11.8%.
Our brands grew strongly, up 9.1%, and Trading profit increased by 11.5%,
as we successfully offset exceptionally high input cost inflation through
a combination of cost efficiencies and pricing.

Financial results

Overview

£m
Branded revenue
Non-branded revenue
Group revenue

Divisional contribution2
Divisional contribution margin
Trading profit1
Trading profit margin
Adjusted EBITDA3
Adjusted profit before tax4
Adjusted earnings per share7 (pence)
Basic earnings per share (pence)

FY22/23
844.2
162.2
1,006.4

FY21/22
774.1
126.4
900.5

% change
9.1%
28.3%
11.8%

216.2
21.5%
157.5
15.7%
182.3
137.2
12.9
10.6

193.6
21.5%

141.2
15.7%
160.4
121.4
11.5
9.0

11.7%
0.0ppts

11.5%
0.0ppt
13.7%
13.0%
12.7%
17.8%

The table above is presented including the impact of The Spice Tailor acquisition. A reconciliation excluding The Spice

Tailor is included in the appendices.

Group revenue increased by 11.8% in the year, with branded revenue up 9.1% and non-
branded revenue 28.3% higher. Revenue growth of 6.6% in the first half of the year
accelerated to 15.8% in H2. Divisional contribution grew by 11.7% to £216.2m, with margins
in line with the prior year and Trading profit increased by 11.5% to £157.5m. Group and
corporate costs rose in the year, reflecting wage and salary inflation, additional strategic
roles and a provision release in the prior year. The Company also paid one-off cost of living
payments to colleagues and awarded a bonus to all colleagues in the year. Trading profit
also included other income of £3.8m reflecting a receipt following a temporary interruption
at a manufacturing site, in compensation for equivalent revenue and cost of sales impact
presented within Gross profit. Adjusted profit before tax and adjusted earnings per share
increased by 13.0% and 12.7% respectively. Basic earnings per share for FY22/23 increased
by 17.8% to 10.6p. The results above include seven month’s ownership of The Spice Tailor.

Trading performance

Grocery

£m
Branded revenue
Non-branded revenue
Total revenue

Divisional contribution2
Divisional contribution margin

FY22/23
635.3
111.5
746.8

189.2
25.3%

FY21/22
560.1
87.6
647.7

160.2
24.7%

% change
13.4%
27.3%
15.3%

18.1%
+0.6ppts

The table above is presented including the impact of The Spice Tailor acquisition. A reconciliation excluding The Spice

Tailor is included in the appendices.

Grocery revenue increased by 15.3% in the year to £746.8m and Branded revenue grew
by 13.4% to £635.3m. Non-branded revenue increased by £23.9m to £111.5m. Divisional
contribution was 18.1% higher at £189.2m and consequently, divisional contribution
margins increased by 60 basis points.

In the fourth quarter, Grocery revenue increased by 24.7%, with very strong growth in
both branded and non-branded revenue, reflecting pricing and benefits of the branded
growth model across the portfolio. Market share13 grew by 64 basis points across the year,

illustrating the strength and resilience of
the Group’s portfolio as consumers budgets
came under pressure. Non-branded revenue
grew due to pricing benefits in retailer
branded product categories and recovery
in out of home sales compared to the
prior year.

The Group’s branded growth model
leverages the strength of its market leading
brands, launching insightful new products,
supporting the brands with emotionally
engaging advertising and building strategic
retail partnerships. During the year, the
Group expanded investment in its ‘Best
Restaurant in Town’ campaign, which
highlights great value meal ideas across the
Grocery portfolio. This strategy has driven
5.3% compound annual branded revenue
growth for the combined UK Grocery and
Sweet Treats businesses over the last three
years (this excludes revenue related to The
Spice Tailor).

Revenue growth of Batchelors and
Nissin noodles ranges were particularly
strong in the year, as consumers sought
convenient, tasty and affordable meal
solutions across the respective product
ranges. Consequently, Batchelors is now the
Group’s largest Grocery brand by revenue.
New product development, driven by key
consumer trends included Sharwood’s East
Asian cooking sauces, Batchelors pasta
‘n’ sauce chef specials, Ambrosia Deluxe
custard pots and Plantastic cooking sauces
and protein pots.

Strong, collaborative partnerships with
customers is another key element of the
Group’s branded growth model. Ambrosia
and Angel Delight teamed up with the
Minions to deliver great instore activity
in conjunction with on pack offers to win
cinema tickets. Additionally, Batchelors
continued to partner with the DC Warner
Brothers Superhero franchise to offer
consumers the opportunity to win prizes.
These are both pertinent examples of
driving volume uplifts with retail customers
leveraging the strength of the Group’s brands
and the respective franchise partners.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOperating and financial review

CONTINUED

Another of the Group’s growth strategies is to leverage its strong brand equities to expand
into adjacent categories. Revenues from products launched in new categories increased by
33% in the year and was led by a particularly good performance from Ambrosia porridge
pots. This product benefits from being ready to eat with the distinctive creamy texture
characteristic of Ambrosia. The ‘on the go’ porridge pot market is a high growth category,
and Ambrosia porridge succeeded in gaining over 10% value share in certain major retailers.

The Group acquired The Spice Tailor brand in the year. Complementing the Sharwood’s and
Loyd Grossman brands in the cooking sauces and accompaniments category, The Spice Tailor
grew revenue by 25% on a 12 months pro forma basis, to £17m in FY22/23, in line with
expectations and ahead of its historical growth rate.

New product development for FY23/24 include Loyd Grossman stir in sauces, Sharwood’s
lower fat curry pastes and Batchelors cook with noodles.

Sweet Treats

£m
Branded revenue
Non-branded revenue
Total revenue

Divisional contribution2
Divisional contribution margin

FY22/23
208.9
50.7
259.6

27.0
10.4%

FY21/22
214.0
38.8
252.8

33.4
13.2%

% change
(2.4%)
30.5%
2.7%

(19.2%)
(2.8ppt)

Revenue in the Sweet Treats business grew by 2.7% in the year. Branded revenue was
£208.9m, (2.4%) lower than the prior year, while non-branded revenue increased by 30.5%
to £50.7m. The particularly strong growth in non-branded revenue of 30.5% was due to
pricing benefits of existing ranges and contract wins in pies and tarts and seasonal ranges. In
the fourth quarter, overall revenue growth was similar to the full year, with revenue growing
by 2.9%. Branded revenue showed an improving trend compared to the third quarter and
non-branded grew by over 60% versus the prior year.

Divisional contribution was £27.0m in the year, £6.4m lower than FY21/22. While divisional
contribution margins of 10.4% were 2.8 percentage points lower than the prior year, they
were 1.1 percentage points higher than two years ago. Revenue growth reflected pricing to
help recover input cost inflation, partly offset by lower volumes due to lower promotional
activity, especially in the first half of the year and some price elasticity effects which we
expect to recover over the coming months. In the second half, Sweet Treats was also
affected by some unscheduled maintenance of a Cadbury cake plant line which impacted
Divisional contribution in the year.

The Mr Kipling brand launched a new, non-HFSS (non-high in fat, salt & sugar) cake range
called ‘Deliciously Good’ in the year, which received a good response from consumers.
This new range is a clear demonstration of how the Group is delivering against the Group’s
‘Enriching Life Plan’ ESG strategy and offers consumers further options to support healthier
lifestyles. The product range is made with 30% less sugar and lower fat and benefits from a
higher content of fibre and fruit compared with the standard Mr Kipling range. These cakes
are the only full range which can be promoted on end of aisles and at front of store in large
supermarkets, under new legislation. Other new product development launched in the year
included Mr Kipling Signature brownie bites and Plantastic Millionaire Flapjacks.

Mr Kipling also benefitted from a fresh new TV campaign for Mr Kipling, the ‘Piano’ advert,
continuing the strategy under the branded growth model of building emotional connections
with consumers. Looking ahead to next year, product innovation to be launched to market
includes Mr Kipling Deliciously Good loaf cakes and Cadbury Mini rolls in mint and orange
flavours.

International
Revenue overseas (on a constant currency
basis and excluding The Spice Tailor)
increased by 10%8 compared to the prior
year. On a reported basis and including
The Spice Tailor, revenue growth was 19%.
This progress was broad based across
the Group’s target markets of Australia,
Canada, Europe, Ireland and the USA. The
key focus brands which the Group considers
possess the greatest potential for long-term
international growth, are Sharwood’s, Mr
Kipling and The Spice Tailor. In FY22/23,
Sharwood’s and Mr Kipling grew by 30% and
11% respectively.

The Group’s strategy of building sustainable
businesses in its target markets is progressing
well. In Australia, the Mr Kipling and Cadbury
cake brands have collectively delivered
the Group’s highest ever share of the cake
market in the year and reached 15.6% on a
full year basis, extending leadership of the
cake category. Additionally, and following the
acquisition of The Spice Tailor, the reach in
the Australian ethnic cooking sauces market
is significantly enhanced, and presents
further opportunity for growth.

The Mr Kipling test in the USA concluded
successfully with encouraging rate of sale
KPIs; wider rollout to additional retailers has
now commenced and is expected to build
during FY23/24. Sharwood’s also grew sales
strongly in the US throughout the year. In
Canada, revenue more than doubled in the
year following the listing of 30 new product
lines of Sharwood’s in a leading North
American retailer. This was followed up by
listings of The Spice Tailor in the same retailer
shortly after acquisition, while Mr Kipling
cake also delivered good sales growth in
the year.

Sales in Ireland were, like the UK, broad
based and Nissin noodles sales more than
doubled. Europe continues to deliver
distribution gains for Sharwood’s, entering
the Netherlands for the first time and
expanding presence in Spain and Germany.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Operating profit
Operating profit grew by £1.1m to £132.2m in the year. Trading profit increased to £157.5m,
as described above. Brand amortisation was £20.7m in the year and movement in the
fair valuation of foreign exchange and derivative contracts was a charge of £1.8m. Net
interest on pensions and administrative expenses was a credit of £17.7m (FY21/22: £4.2m),
reflecting c.£26m due to an interest credit on the opening combined surplus of the pension
scheme, partly offset by approximately £8m of administrative expenses. Following the
decision to close the Group’s Knighton manufacturing site, restructuring costs of £7.6m
were incurred in addition to an impairment charge of £3.6m. Total restructuring costs taken
in the year were £11.1m which included some additional supply chain restructuring. Other
non-trading items were £5.8m, predominantly reflecting M&A advisory costs and other one-
off supply chain charges. Other non-trading income of £1.5m in the prior period primarily
related to the successful resolution of a legacy legal matter.

Finance costs
Net finance cost was £19.8m in the year, a reduction of £8.7m compared to the prior year.
This was primarily due to the accelerated amortisation of debt issuance costs (£4.3m)
and the early redemption of the Group’s now retired £300m 2023 dated Fixed Rate Notes
(£4.7m) in FY21/22. Net regular interest5 was £20.3m, £0.5m higher than last year. This
increase was due to a higher SONIA (‘Sterling Overnight Index Average’) rate applicable to
the Group’s revolving credit and debtors securitisation facilities, partly offset by the full year
effect of lower Senior secured notes interest charges following issuance of the Group’s 3.5%
2026 Fixed Rate Notes.

Taxation
The taxation charge for the year of £20.8m (2021/22: £25.1m) comprised a charge on
operating activities of £21.4m (2021/22: £19.5m) and adjustments to remeasure the
opening deferred tax balances, the latter due to the change in UK corporation tax from 19%
to 25%, effective 1 April 2023. The Group currently retains brought forward losses which it
can utilise to offset against future tax liabilities and has now recommenced paying cash tax.

Earnings per share

£m
Operating profit
Net finance cost
Profit before taxation
Taxation
Profit after taxation
Average shares in issue (million)
Basic Earnings per share (pence)

FY22/23
132.2
(19.8)
112.4
(20.8)
91.6
861.2
10.6

FY21/22
131.1
(28.5)
102.6
(25.1)
77.5
858.8
9.0

% change
0.8%
30.5%
9.6%
17.1%
18.2%
0.3%
17.8%

The Group reported profit before tax of £112.4m in the year, a 9.6% increase on FY21/22.
Profit after tax increased by £14.1m to £91.6m and basic earnings per share increased by
17.8% to 10.6 pence.

Cash flow
Net debt as at 1 April 2023 was £274.3m, a reduction of £10.7m compared to the prior
year. An inflow of cash and cash equivalents was £9.1m and movement in lease liabilities of
£2.8m was partly offset by a £1.2m amortisation of debt issuance costs. The reduction in
Net debt was after paying consideration of £43.8m to acquire The Spice Tailor.

Trading profit was £157.5m, as described above, while depreciation and software
amortisation was £24.8m. A £24.8m outflow of working capital was due to higher stock
reflecting inflation of both raw materials and finished goods, with an associated impact on
debtors. Pension deficit contribution payments of £37.5m and administration cash were
£7.6m, totalling £45.1m cash outflow to the schemes.

On a statutory basis, cash generated from
operating activities was £87.2m (2021/22:
£90.1m) after deducting net interest paid
of £19.6m (FY21/22: £20.8m) reflecting a
lower coupon on the Group’s Fixed Rate
Notes, partly offset by higher SONIA rates
on the Group’s unutilised RCF and debtors
securitisation facilities. The Group paid Tax
of £1.5m (2021/22: Nil).

Cash used in investing activities was
£63.8m (FY21/22: £23.2m) and included
acquisition consideration of The Spice Tailor
as described above and capital expenditure
of £20.0m (FY21/22: £23.2m). In FY23/24,
the Group expects to increase its capital
investment, as it looks to accelerate
investment across the supply chain and
transfer some manufacturing capability
from the Knighton site to Ashford, Kent and
Carlton, South Yorkshire. Such investment
includes both growth projects supporting
the Group’s innovation strategy and cost
release projects to deliver efficiency savings.
The strategy of investing in supply chain
infrastructure represents a virtuous cycle
to provide the fuel for the Group’s branded
growth model. Projects completed in the
year include automation solutions at some
of the Group’s cake manufacturing sites;
at the Stoke site an end of line auto case
packer and triple head depositor were
installed and Carlton invested in an end of
line auto case packer.

Cash used in financing activities was £14.3m
in the year (FY21/22: £13.7m) which
included a £10.3m dividend payment to
shareholders. A dividend match payment to
the Group’s pension schemes of £2.7m was
also made in the year.

The Group’s Net debt/adjusted EBITDA ratio
at 1 April 2023 was 1.5x, a reduction of 0.2x
compared to the prior year position and
in line with the medium-term target. As at
1 April 2023, the Group held cash and bank
deposits of £63.4m and its £175m revolving
credit facility was undrawn.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOperating and financial review

CONTINUED

Pensions

IAS 19 Accounting Valuation (£m)
Assets
Liabilities
Surplus/(Deficit)
Net of deferred tax (25%)

The Group’s pension scheme had a
combined surplus of £765.5m at 1 April
2023, a reduction of £179.4m compared to
the prior year. This is equivalent to a surplus
of £574.1m net of a deferred tax charge
of 25.0%. Asset values and liabilities fell in
both sections of the schemes due to the
hedging in place. The movement in liabilities
was impacted by the increase in discount
rate, from 2.75% to 4.80%, reflecting recent
rises in UK corporate bond yields. Asset
values were lower across a number of asset
classes, notably in absolute return products
and credit funds.

A deferred tax rate of 25.0% is deducted
from the IAS19 retirement benefit valuation
of the Group’s schemes to reflect the fact
that pension deficit contributions made to
the Group’s pension schemes are allowable
for tax.

Assets in the combined schemes decreased
by £1,307.2m, or by 25.6%, to £3,792.8m
in the period. RHM scheme assets reduced
by £1,033.5m to £3,240.2m while the
Premier Foods’ schemes assets decreased
by £273.7m to £552.6m. In the combined
schemes, liabilities decreased by £1,127.8m,
or 27.1%, to £3,027.3m. The RPI inflation
rate assumption used decreased by thirty
basis points to 3.3%, compared to 3.6% as at
2 April 2022.

The pension Trustee manages impacts from
market volatility efficiently and there were
no issues encountered by the scheme as a
result of LDI (‘Liability Driven Investment’)
asset collateral calls due to volatility in
financial markets during FY22/23.

1 April 2023
RHM Premier Foods
552.6
(735.4)
(182.8)
(137.1)

3,240.2
(2,291.9)
948.3
711.2

Combined
3,792.8
(3,027.3)
765.5
574.1

2 April 2022
RHM Premier Foods
826.3
(1,020.2)
(193.9)
(145.4)

4,273.7
(3,134.9)
1,138.8
854.1

Combined
5,100.0
(4,155.1)
944.9
708.7

Dividend
Subject to shareholder approval, the
directors have proposed a final dividend
of 1.44 pence in respect of the 52 weeks
ended 1 April 2023 (FY21/22: 1.2p), payable
on 28 July 2023 to shareholders on the
register at the close of business on 30
June 2023. The shares will go ex-dividend
on 29 June 2023. This represents a 20%
increase in the dividend paid per share
compared to FY21/22, is ahead of adjusted
earnings per share growth and is consistent
with Board’s approach of proposing a
progressive dividend to shareholders.

Outlook
The Group delivered a strong financial
performance in FY22/23, demonstrated by
clear progress across all the elements of
its five pillar strategy. Looking ahead to the
coming year, the Group has strong plans
in place for product innovation, further
consumer marketing and increased capital
investment. Additionally, it expects to build
on the initial success in new categories,
deliver further progress Internationally and
continue to explore M&A opportunities.
With continued positive momentum and a
good start to Quarter one, the Group is well
placed to make further progress this year,
with expectations unchanged.

Duncan Leggett
Chief Financial Officer

18 May 2023

Pensions – Triennial actuarial
valuation
As at 31 March 2022, the Group’s pension
scheme was valued at a combined surplus
of £297m on a technical provisions basis.
Within this, was an RHM section surplus of
£665m and a Premier Foods section deficit
of £368m. This represents an improvement
of approximately £511m compared to
the previous technical provisions basis
at 31 March 2019, when the combined
valuation was a deficit of £214m.

Following this valuation, the Company
and Trustees of the schemes have agreed
to reduce the annual deficit contribution
payments by £5m per annum to £33m
until FY25/26. Additionally, administrative
expenses (including the UK Government
PPF levy) have reduced from the Group’s
guidance of £6-8m per annum to £6m.
Consequently, and in addition to an
increase in the Group’s post-tax weighted
average cost of capital to 9.1% (FY21/22:
7.4%), the net present value of future
pension contributions to the end of the
respective recovery periods has reduced by
approximately 50%, from £240-260m15 to
approximately £125m15. This includes the
benefit of a c.£100m surplus from the RHM
section on a buyout valuation basis.

Capital allocation
The Group is a highly cash generative
business and has substantially reduced its
interest costs in recent years. Today, the
allocation of capital is split across pension
contributions, capital investment and
dividends. Additionally, the Group continues
to explore M&A opportunities. In the
medium term, pensions contributions are
expected to reduce further, freeing up more
cash to spend on capital investment, M&A
and dividends.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Appendices
The Company’s results are presented for the 52 weeks ended 1 April 2023 and the comparative period, 52 weeks ended 2 April 2022. All
references to the ‘quarter’, unless otherwise stated, are for the 13 weeks ended 1 April 2023 and the comparative periods, 13 weeks ended
2 April 2022.

Full year and Quarter 4 Sales

FY Sales (£m)
Grocery
Branded
Non-branded
Total
Sweet Treats
Branded
Non-branded
Total
Group
Branded
Non-branded
Total
% change vs prior year
Grocery
Branded
Non-branded
Total
Sweet Treats
Branded
Non-branded
Total
Group
Branded
Non-branded
Total

Q4 Sales (£m)
Grocery
Branded
Non-branded
Total
Sweet Treats
Branded
Non-branded
Total
Group
Branded
Non-branded
Total
% change vs prior year
Grocery
Branded
Non-branded
Total
Sweet Treats
Branded
Non-branded
Total
Group
Branded
Non-branded
Total

Divisional contribution & Trading profit (£m)
FY22/23

Divisional contribution2
Grocery
Sweet Treats
Total
Group & corporate costs
Other income
Trading profit1 - New definition

FY21/22

Divisional contribution2
Grocery
Sweet Treats
Total
Group & corporate costs
Trading profit1 - Old definition
Less: software amortisation
Trading profit1 - New definition

FY22/23

Excluding
The Spice Tailor

The Spice Tailor

Including
The Spice Tailor

625.3
111.5
736.8

208.9
50.7
259.6

834.2
162.2
996.4

11.6%
27.3%
13.8%

(2.4%)
30.5%
2.7%

7.8%
28.3%
10.6%

10.0
0.0
10.0

0.0
0.0
0.0

10.0
0.0
10.0

635.3
111.5
746.8

208.9
50.7
259.6

844.2
162.2
1,006.4

13.4%
27.3%
15.3%

(2.4%)
30.5%
2.7%

9.1%
28.3%
11.8%

FY22/23

Excluding
The Spice Tailor

The Spice Tailor

Including
The Spice Tailor

171.5
30.7
202.2

54.4
7.0
61.4

225.9
37.7
263.6

19.2%
37.6%
21.7%

(1.8%)
63.9%
2.9%

13.4%
41.8%
16.7%

5.0
0.0
5.0

0.0
0.0
0.0

5.0
0.0
5.0

176.5
30.7
207.2

54.4
7.0
61.4

230.9
37.7
268.6

22.7%
37.6%
24.7%

(1.8%)
63.9%
2.9%

15.9%
41.6%
18.9%

FY22/23

Excluding
The Spice Tailor

The Spice Tailor

Including
The Spice Tailor

188.7
27.0
215.7
(62.5)
3.8
157.0

160.2
33.4
193.6
(45.3)
148.3
(7.1)
141.2

0.5
–
0.5
–
–
0.5

–
–
–
–
–
–
–

189.2
27.0
216.2
(62.5)
3.8
157.5

160.2
33.4
193.6
(45.3)
148.3
(7.1)
141.2

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOperating and financial review

CONTINUED

EBITDA to Operating profit reconciliation (£m)
Adjusted EBITDA3
Depreciation
Trading profit – Old definition
Software amortisation
Trading profit – New definition
Amortisation of brand assets
Fair value movements on foreign exchange & derivative contracts
Net interest on pensions and administrative expenses
Non-trading items – GMP equalisation
Non-trading items – restructuring costs
Non-trading items – other non-trading items
Impairment of fixed assets
Operating profit

Finance costs (£m)
Senior secured notes interest
Bank debt interest – net

Amortisation of debt issuance costs
Net regular interest5

Write-off of financing costs
Early redemption fee
Re-measurement due to discount rate change
Other finance cost
Other finance income
Net finance cost

Adjusted earnings per share (£m)
Trading profit1 - New definition
Less: Net regular interest5
Adjusted profit before tax
Less: Notional tax (19%)
Adjusted profit after tax6
Average shares in issue (millions)
Adjusted earnings per share (pence)

Net debt (£m)
Net debt11 at 2 April 2022
Movement in cash
Movement in debt issuance costs
Movement in lease creditor
Net debt at 1 April 2023
Adjusted EBITDA
Net debt / Adjusted EBITDA

Free cash flow (£m)
Trading profit1 - New definition
Depreciation & software amortisation
Other non-cash items
Capital expenditure
Working capital
Operating cash flow17
Interest
Pension contributions
Free cash flow12
Non-trading items
Net (payments)/proceeds from share issue
Re-financing fees
Taxation
Dividend (including pensions match)
Acquisition
Movement in cash
Repayment of borrowings
Proceeds from borrowings
Net increase in cash and cash equivalents

FY22/23
11.5
6.9
18.4
1.9
20.3

–
–
(1.1)
0.6
–
19.8

FY22/23
157.5
(20.3)
137.2
(26.1)
111.1
861.2
12.9

FY22/23
182.3
(19.9)
162.4
(4.9)
157.5
(20.7)
(1.8)
17.7
–
(11.1)
(5.8)
(3.6)
132.2

FY21/22
13.4
4.3
17.7
2.1
19.8

4.3
4.7
(0.9)
0.8
(0.2)
28.5

FY21/22
141.2
(19.8)
121.4
(23.1)
98.3
858.8
11.5

FY22/23
157.5
24.8
4.7
(20.0)
(24.8)
141.9
(19.6)
(45.1)
77.5
(8.3)
(1.1)
(0.7)
(1.5)
(13.0)
(43.8)
9.1
–
–
9.1

FY21/22
167.5
(19.2)
148.3
(7.1)
141.2
(19.9)
4.4
4.2
(0.3)
–
1.5
–
131.1

change
1.9
(2.6)
(0.7)
0.2
(0.5)

4.3
4.7
0.2
0.2
(0.2)
8.7

% change
11.5%
(2.6%)
13.0%
(13.0%)
13.0%
0.3%
12.7%

285.0
(9.1)
1.2
(2.8)
274.3
182.3
1.5x

FY21/22
141.2
26.3
4.1
(23.2)
(21.0)
127.4
(20.8)
(41.4)
65.2
0.9
1.3
(13.2)
–
(11.0)
–
43.2
(320.0)
330.0
53.2

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023The following table outlines the basis on which the Group will report headline revenue for FY23/24.
This includes The Spice Tailor but excludes sales from Knighton which will be managed for exit during the course of FY23/24, following the
decision to close the site. In FY22/23, all Knighton revenue was all reported in Grocery – Non-branded.

Group sales ex Knighton Foods (£m)
Group sales (including The Spice Tailor)
Knighton
Group sales (including The Spice Tailor, ex Knighton)

FY22/23 revenue by quarter

Quarter 1
197.0
(6.2)
190.8

Quarter 2
222.9
(7.2)
215.7

Quarter 3
318.0
(9.8)
308.2

Quarter 4
268.5
(7.6)
260.9

Total
1,006.4
(30.8)
975.6

Notes and definitions of alternative performance measures
The Company uses a number of alternative performance measures to measure and
assess the financial performance of the business. The directors believe that these
alternative performance measures assist in providing additional useful information
on the underlying trends, performance and position of the Group. These alternative
performance measures are used by the Group for reporting and planning purposes and
it considers them to be helpful indicators for investors to assist them in assessing the
strategic progress of the Group.

The Group uses Trading profit to review overall Group profitability. Trading profit is
defined as profit/(loss) before tax, before net finance costs, amortisation of brand
assets, non-trading items (items requiring separate disclosure by virtue of their
nature in order that users of the financial statements obtain a clear and consistent
view of the Group’s underlying trading performance), fair value movements on
foreign exchange and other derivative contracts, net interest on pensions and
administration expenses and past service costs. The revised definition of Trading
profit includes software amortisation as the Group considers this should be
treated in the same way as tangible asset depreciation for definitional purposes.
FY21/22 has been re-stated accordingly.

9. Non-trading items have been presented separately throughout the financial

statements. These are items that management believes require separate disclosure
by virtue of their nature in order that the users of the financial statements obtain
a clear and consistent view of the Group’s underlying trading performance. In
identifying non-trading items, management have applied judgement including
whether i) the item is related to underlying trading of the Group; and/or ii) how
often the item is expected to occur.

10. Software amortisation is the annual charge related to the amortisation of the

Group’s software assets during the period.

11. Net debt is defined as total borrowings, less cash and cash equivalents and less

capitalised debt issuance costs.

12. Free cash flow is Net increase or decrease in cash and cash equivalents excluding
proceeds and repayment of borrowings, less dividend payments, disposal
proceeds, re-financing fees, net proceeds from share issues, tax, acquisitions and
non-trading items.

13.

IRI, 52 weeks ended 1 April 2023.

2. Divisional contribution refers to Gross Profit less selling, distribution and marketing

14. Revenue growth excludes The Spice Tailor.

expenses directly attributable to the relevant business segment.

3. Adjusted EBITDA is Trading profit as defined in (1) above excluding depreciation

and software amortisation.

15. The schedule of future contributions are as agreed per the 2022 actuarial funding
valuation for the Premier Foods sections, discounted using the Company post tax
WACC of 9.1%.

4. Adjusted profit before tax is Trading profit as defined in (1) above less net regular

16. Acquisition accounting pertaining to The Spice Tailor acquisition can be found in

interest.

Note 28 of the financial statements.

5. Net regular interest is defined as net finance cost after excluding write-off of
financing costs, early redemption fees, other finance costs and other finance
income.

6. Adjusted profit after tax is Adjusted profit before tax as defined in (4) above less a

notional tax charge of 19.0% (2021/22: 19.0%).

17. Operating cash flow excludes interest and pension contributions.

18. SBTi refers to the Science Based Targets initiative, a coalition which defines and

promotes best practice emissions reductions and net zero targets in line with
climate science.

19. Champions 12.3 refers to a coalition who are dedicated to the pursuit of reducing

7. References to Adjusted earnings per share are on a non-diluted basis and is

food waste and loss.

calculated using Adjusted profit after tax as defined in (6) above divided by the
weighted average of the number of shares of 861.2 million (52 weeks ended 2
April 2022: 858.8 million).

International sales exclude The Spice Tailor and remove the impact of foreign
currency fluctuations and adjusts prior year sales to ensure comparability in
geographic market destinations. The constant currency calculation is made by
adjusting the current year’s sales to the same exchange rate as the prior year. The
constant currency adjustment is calculated by applying a blended rate.

Reported
(including
The Spice
Tailor)
63.3
53.4
18.5%

Reported
(excluding
The Spice
Tailor)
59.4
53.4
11.3%

Adjustment
(0.7)
N/A
N/A

Constant
currency
58.7
53.4
10.0%

£m
FY22/23
FY21/22
Growth/(decline) %

Additional notes:
• The directors believe that users of the financial statements are most interested
in underlying trading performance and cash generation of the Group. As such
intangible brand asset amortisation and impairment are excluded from Trading profit
because they are non-cash items.

• Non-trading items have been excluded from Trading profit because they are

incremental costs incurred as part of specific initiatives that may distort a user’s view
of underlying trading performance.

• Net regular interest is used to present the interest charge related to the Group’s

ongoing financial indebtedness, and therefore excludes non-cash items and other
credits/charges which are included in the Group’s net finance cost.

• Group & corporate costs refer to group and corporate expenses which are not

directly attributable to a reported segment and are disclosed at total Group level.

• In line with accounting standards, the International operating segment, the results of
which are aggregated within the Grocery reported segment, are not required to be
separately disclosed for reporting purposes.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSKey performance indicators (KPIs)

We use a number of performance indicators to monitor
financial, operational and ESG performance.

These are reviewed on a regular basis
by our senior management teams and
the Board. Performance indicators are
used to encourage focus on the delivery
of our key strategic priorities. They are
used to measure performance, highlight

areas for attention and corrective action,
as well as recognising good performance
and celebrating success. Trading profit
and certain ESG targets also form part of
management’s bonus objectives.

The KPIs set out below are aligned with
the Group’s five pillar growth strategy and
also the commitments set out in our ESG
strategy, the Enriching Life Plan.

Financial KPIs

£1,006.4m £157.5m

Revenue1

FY22/23

FY21/22

FY20/21

FY19/20

FY18/19

Trading profit1

£1,006.4m

£900.5m

£934.2m

£847.1m

£824.3m

FY22/23

FY21/22

FY20/21

FY19/20

FY18/19

£157.5m

£141.2m

£141.6m

£124.0m

£117.1m

Why is this important?
Delivering sustainable revenue growth is one of our
strategic priorities.

Progress we have made
Revenue was up +11.8% versus prior year. This growth has
been driven by our branded growth model of delivering
new product innovation based on current consumer
trends, together with engaging advertising and strategic
relationships with our retail partners. Performance also
reflects the recovery of input cost inflation.

Why is this important?
This measure reflects the revenues and costs associated
with the operational performance of the business and is
also a good proxy for the cash generative capacity of the
business.

Progress we have made
Trading profit increased by +11.5% versus prior year. This
improvement was driven by our strong branded revenue
growth within Grocery offset by a softer performance
within Sweet Treats.

Link to strategy

1 A definition and reconciliation of non-GAAP measures to reported measures are set out on pages 53 and 55. Trading profit for FY22/23 is stated including software

amortisation, and the prior year comparatives have been re-stated accordingly.

2 Prior year comparatives have been represented in accordance with the revised definition of free cash flow set out on page 54.

3 For a definition and reconciliation, please refer to note 8, on page 55.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 20231.5x

£77.5m

Net debt adjusted EBITDA ratio1

Free cash flow1

FY22/23

FY21/22

FY20/21

FY19/20

FY18/19

1.5x

1.7x

2.0x

2.8x

3.2x

FY22/23

FY21/22

FY20/21

FY19/20

FY18/19

£77.5m

£65.2m

£71.2m1,2

£70.5m2

£50.5m2

Why is this important?
Free cash flow is a measure of the overall health of the
business. It reflects the underlying cash generated by the
Group and helps inform capital allocation decisions.

Progress we have made
Free cash flow increased by +18.7% in the year, to £77.5m.
Cash flow benefitted from the strong trading performance
in the period.

Link to strategy

Strategy pillars

Continue to grow the UK core

Supply chain investment

Expand UK into new categories

Build international businesses with critical mass

Inorganic opportunities

Why is this important?
This ratio is the key metric used by the Group in
measuring its debt level relative to the overall
performance of the business.

Progress we have made
Net debt reduced by £10.7m, from £285.0m to £274.3m,
reflecting strong free cash flow in the year, partly offset by
the cost of The Spice Tailor acquisition. As a result of this
deleveraging and adjusted EBITDA growth, the ratio of Net
debt to adjusted EBITDA reduced from 1.7x to 1.5x.

(Note: the comparative for FY18/19 is stated pre adoption
of IFRS 16).

Link to strategy

£58.7m

International revenue (at constant currency)3

FY22/23

FY21/22

FY20/21

£58.7m

£54.8m

£53.9m

Why is this important?
Expanding our international business is one of our
strategic priorities.

Progress we have made
International revenue, excluding the performance
of The Spice Tailor, was £58.7m, +10.0% higher than
prior year, on a constant currency basis3. This was the
result of growth in our five strategic markets, with
strong performances from Sharwood’s and Mr Kipling.
The international business has increased revenue by +37%
since we launched our new strategy in 2020.

Link to strategy

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSKey performance indicators (KPIs)

CONTINUED

Last year we introduced a number of new non-financial KPIs which align
with our business model, our refreshed ESG strategy and our commitment
to be a responsible food business.

Launching new products based on consumer
trends, with a major focus on health and
nutrition, is at the heart of our branded
business model.

In October 2021 we launched a new ESG
strategy the Enriching Life Plan. To align with
our new ESG priorities we have included
a KPI to represent each of the pillars of
the Enriching Life Plan: Product – sales
of products that meet high nutritional

standards; Planet – CO2 emissions; and
People – Senior management roles held
by females.

Further details of progress against our ESG
targets are set out in the section on our
Enriching Life Plan on pages 26 to 37 and
in Enriching Life Plan disclosure tables on
pages 178 to 183.

Colleague safety is our first priority as
a business. The Reporting of Injuries,

Diseases and Dangerous Occurrences
Regulations (‘RIDDOR’), is a major indicator
of the success of our Health and Safety
protocols and allows us to benchmark
our performance against the UK food
manufacturing industry.

Following improved usage data and
emissions factors from our suppliers, we
have updated our scope 2 emissions for
both the current and prior year.

Non-financial KPIs

-31 bps

(FY21/22: +41bps)

Branded market share (value growth)1

Why is this important?
Increasing market share indicates consumer preference for
our products and drives category growth for the business.

Progress we have made
Our market share value fell by -31 basis points (‘bps’),
versus prior year. We experienced strong growth within
Grocery, demonstrating the strength of our branded
growth model and the resilience of the Group’s brands.
This was offset by a softer performance in Sweet Treats,
due to a reduction in promotional activity and temporary
price elasticity.

Link to strategy

IRI data for the 52 weeks ended 1 April 2023 and 26 March 2022.

£335.0m

Revenue from products that meet high
nutritional standards

FY22/23

FY21/22

FY20/21

£335.0m

£286.0m

£320.0m

Why is this important?
Under our Enriching Life Plan we have set a target to more
than double sales of products that meet high nutritional
standards (see page 178 for a definition).

Progress we have made
Over the year, we continued to bring a range of more
healthy products to market such as: Mr Kipling Deliciously
Good range – a new range of cakes made with 30% less
sugar and lower fat and which benefit from a higher content
of fibre and fruit compared with the standard Mr Kipling
range – and no added sugar Homepride Pasta Bakes.

Link to strategy

Premier Foods plc Annual Report for the 52 weeks ended 1 April 202340%

51,749

Senior management roles held by females

Scope 1 and 2 emissions (tCO2e)

FY22/23

FY21/22

FY20/21

40%

37%

28%

FY22/23

FY21/22

FY20/21

51,749

56,188

60,359

Why is this important?
Reducing carbon emissions is a key priority under our
Enriching Life Plan, as we aim to reduce scope 1 and 2
emissions by 67% and achieve net zero carbon emissions
by 2040.

Progress we have made

Total scope 1 and 2 location-based emissions were
reduced by 7.9% over the year, as a result of improved
efficiency from capital investment in projects such as
boiler upgrades, compressor renewals and oven profiling.
We have also launched a ‘Smart Energy’ programme
and established site energy councils to coordinate the
Group’s approach to energy efficiency.

Link to strategy
Supports our Enriching Life Plan

Strategy pillars

Continue to grow the UK core

Supply chain investment

Expand UK into new categories

Build international businesses with critical mass

Inorganic opportunities

Why is this important?
Under our Enriching Life Plan we are targeting gender
balance for our senior management population by 2030.
Senior management is defined as the Executive Leadership
Team and their direct reports.

Progress we have made
Over the year, we have continued to progress our I&D
strategy to improve accessibility to leadership roles
through enhanced recruitment, development and
mentoring programmes. As a result, the number of women
within senior leadership rose to 40% as at year-end.

Link to strategy
Supports our Enriching Life Plan

0.09

(FY21/22: 0.12, RIDDOR reportable accident
per 100,000 hours worked)

RIDDORs

Premier Foods

All UK manufacturing

UK Food manufacturing

0.09

0.21

0.55

Why is this important?
Colleague safety is our first priority as a business.

Progress we have made
Over the year RIDDORs reduced by 25% as a result
of a number of initiatives, including a refreshed and
reinvigorated TOP (Total Observation Process) across
sites, which identifies and eliminates potential hazards,
improved H&S communication with poster campaigns,
videos and refreshed induction training, and continued
with unannounced visits to sites, and a continued
behavioural safety focus.

Link to strategy
Supports our Enriching Life Plan

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSRisk management

Our approach
We have an established risk management
framework to identify, evaluate, mitigate
and monitor the risks we face as a
business. Our risk management framework
incorporates both a top-down and a
bottom-up approach, to ensure that we
have maximum input from the Board
through to operational management, to
identify both current and emerging risks
that our business faces as we execute our
strategy and grow the business. Our Board
owns and oversees our risk management
programme, with overall responsibility for

ensuring that our risks are aligned with our
goals and strategic objectives.

The Audit Committee assists the Board in
monitoring the effectiveness of our risk
management and internal control policies,
procedures and systems. The Executive
Leadership Team (ELT) performs a robust
risk assessment on a periodic basis and the
output from this is routinely reviewed by
the Board and the Audit Committee.

Responsibility for risk management is
embedded throughout our organisation
and our first line of defence remains our
colleagues, who have a responsibility

to manage day-to-day risk in their areas
guided by Group policies, procedures,
and controls frameworks. The ELT and
ultimately the Executive, ensure that
these risks are managed, maintained,
reviewed and mitigated according to these
frameworks. The Group’s Internal Audit
function continues to provide assurance
over the effectiveness of mitigating controls.
While copies of these reports are provided
to the ELT to action any necessary control
improvements, the Internal Audit function
reports directly to the Audit Committee
who monitor and challenge management to
ensure control improvements are actioned.

Risk management framework

Board of Directors
Assess principal risks and set risks appetite.
Overall responsibility for maintaining sound risk
management and internal controls.

Audit Committee
Set risk management framework. Assess
effectiveness of the Group’s risk framework
and internal controls.

Executive Leadership Team
Implement risk management framework.
Assess effectiveness of the Group’s risk
framework and internal controls.

Risk and Internal Audit
Test internal controls and co-ordinate risk management
activity. Provide support to business risk owners and
report risk information across the Group.

Operational Management
Own and review operational risks. Operate
controls and implement mitigation actions.

•

Periodic reports provided to the
ELT and Board on how efficiently
risks are being managed

Strategic reviews with ELT

•
• Group principal risks reviewed and
agreed with ELT and the Board

NITOR A N D R E

O
M

RISK
MANAGEMENT
PROCESS

ID
E

T
I
F

M E ASURE

• Controls defined to address risks
within tolerance and ownership
defined

• Risk action plans created to manage

risks within appetite

• Risk appetite set by the Board for all

principal risks

• Measurement of risks against

appetite and escalation process

Principal risks and uncertainties
The Board has carried out a robust
assessment of the principal and emerging
risks facing the Group. They include
those that we consider most impact our
business model (see pages 12 and 13) and
the delivery of our long-term strategic
objectives (see pages 18 and 19) and that
would threaten our business model, future
performance, solvency or liquidity. These
risks and uncertainties (pre-mitigation) are
identified in the heatmap opposite, followed
by a more detailed description including key
mitigating activities in place to address them
on pages 62 to 66.

We have also considered the broadening
potential impacts across a number of

principal risks of inflationary pressures
resulting from the ongoing Russia-Ukraine
conflict. These initially impacted energy and
commodity prices but have subsequently
spread into wider inflationary pressures
across the supply chain and are now
being felt by our valued consumers. The
‘Changes since FY21/22’, highlight changes
in the profile of our principal risks and/or
describe our experience and activity over
the last year.

Risk appetite
Our approach is to minimise exposure to
reputational, financial and operational risk
while accepting and recognising a risk/
rewards trade-off in pursuit of our strategic
and commercial objectives. Risk appetite

statements are reviewed routinely by the
ELT and approved by the Board to guide the
actions that management takes in executing
our strategy. As a food manufacturing
company, with many well-known brands,
the integrity of our business is crucial and
cannot be put at risk. Consequently, we
have zero tolerance for risks relating to
food safety and the health and safety of our
employees. In addition, we have set low-
risk appetites for a number of other risks
such as cyber-security, legal, compliance,
environmental and regulatory risks.

Nonetheless, we operate in a challenging
and highly competitive marketplace and as a
result we recognise that strategic, commercial
and investment risks will be required to

n
w
o
d
p
o
T

p
u
m
o
t
t
o
B

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

seize opportunities and deliver results at
pace. We are therefore prepared to make
certain managed financial and operational
investments in pursuit of growth objectives.
Our acceptance of risk is subject to ensuring
that potential benefits and risks are fully
understood and appropriate measures to
mitigate those risks are firstly established.

Emerging risks
The ELT and the Board formally review
emerging risks when considering the
outputs of the risk management processes.
Through both the top-down and bottom-up
risk discussions held across the business,
we seek to identify changes in both existing
and new risks which may have a significant
impact. This includes horizon scanning and
utilising in-house knowledge and expertise
supported by input from external sources,
to identify emerging risks for consideration

and review. These uncertainties may
relate to future economic, regulatory, or
environmental changes, for which examples
include, the further rollout of legislation
related to the UK Government’s programme
to tackle obesity and Extended Producer
Responsibility requirements for packaging.

While significant consideration has been
given to assessing emerging risks, we have
also concluded that these emerging risks
are adequately captured across our existing
broad set of principal risks and, as a result,
no new principal risks are proposed this year.

Future initiatives
We continuously evolve and improve our
approach to risk management, in light of the
ever-increasing volatility and uncertainty
in the external environment. In addition,
risk plays a key role in the cross-functional
team responsible for our approach to the
requirements for Task Force on Climate-
related Financial Disclosures (TCFD), under
a dedicated steering group. We continue to
embed the selection of the key risks used
in our scenario analysis and support the
integration of this activity into our ongoing
risk processes, so that climate-related
considerations become part of our longer-
term strategic thinking and decision-making
in the business. See pages 38 to 48 for
further details on our approach to TCFD.

y
t
i
l
i

b
a
b
o
r
P

Impact

Risks

1 Macroeconomic and geopolitical instability

2 Impact of Government legislation

3 Market and retailer actions

4 Operational integrity

5 Legal compliance

6 Climate risk

7 Technology

8 Product portfolio

9 HR and employee risk

10 Strategy delivery

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSRisk management

CONTINUED

1 Macroeconomic and geopolitical instability

Link to strategy

Risk and potential impact
Our business has been subject to a period
of prolonged uncertainty owing to political
and ongoing economic developments.
While those risks related to Covid-19 have
significantly dissipated, post the initial impact
of the Russian/Ukrainian war on energy and
commodity costs, this has subsequently spread
into broader inflationary pressures that are
creating a ‘cost of living crisis’ for our valued
consumers (also see Risk 8).

How we manage it
• We seek to hedge certain key commodities and
energy supplies, where appropriate, to manage
our exposure to price increases.

• In addition, we actively manage foreign exchange
currency volatility through hedging activity and
through an ongoing supplier risk management
process.

• Our cost-saving and efficiency programmes seek
to minimise the impact of inflationary pressures.
• The ELT closely monitors developments related
to commodity costs, and only after careful
consideration, and where absolutely necessary,
are prices increased.

Changes since FY21/22
• The overarching risk trend was assessed as

stable during the year, however, the blend of
risk factors that contribute to the principal
risk have varied. While we have experienced
elevated input cost inflation, driven by
macroeconomic forces, this has been balanced
by a number of our brands, particularly within
Grocery, performing proportionally well as our
consumers switched to eating at home more
often. This change in consumer preference
has been supported by our ‘Best Restaurant
in Town’ campaign, as detailed under our
‘Continue to Grow the UK Core’ strategic pillar
(see page 18).

• We continually monitor our customer and supplier
base for potential exposure to Russian (or any
other applicable) trade sanctions.

Risk trend 

2 Impact of Government legislation

Link to strategy

Risk and potential impact
The continued focus on health and obesity
may result in a decline in demand for cakes
and desserts and/or our share of them, along
with the risk of additional complexity and cost
as a result of any reformulation efforts. There
is an elevated level of media and Government
scrutiny on health and obesity. The first phase
of the Government legislation restricting
promotions of High Fat, Salt or Sugar (HFSS)
by ‘location’ became effective from 1 October
2022. It is expected that a second phase of
restriction of HFSS products by ‘volume’ will
come into force on 1 October 2023 followed
by an ‘advertising’ restriction for such products
from 1 October 2025.

The UK Government has also introduced a
new tax on non-recyclable plastic packaging
as part of the reformed Packaging Producer
Responsibility Regulations. The introduction of
this escalating tax on plastic packaging and any
further legislation may adversely impact the
products that the Group manufactures.

How we manage it
• We have a wide range of product offerings, which
includes non-HFSS products, that extend our range
of healthier choices, enhance the nutrition profile
of our existing core ranges and help consumers
to make healthier eating choices. Details can be
found in our Enriching Life Plan section on pages
30 and 31.

• We have an ongoing evaluation and development
of the brand portfolio and innovation pipeline
with a focus on healthier options that help us align
with changing consumer preferences (also see
Risk 8).

• Our Environmental, Social and Governance

Changes since FY21/22
• The risk profile remained stable year-on-year.
• The Group continues to actively adapt its

strategy in order to support the phases of the
UK Government’s programme to tackle obesity.
This includes continuing to extend the range of
non-HFSS products available to consumers.

• The UK Government’s primary legislation

(November 2020) to introduce an escalating
tax on plastic material came into effect on
1 April 2022 and the Group has continued its
packaging optimisation programme to ensure
both the minimisation of packaging and that
packaging use is fully recyclable.

Risk trend 

(‘ESG’) Committee, chaired by our CEO, has a
range of cross-functional steering groups that
are responsible for the delivery of our ESG
strategy, including our Packaging steering group.
This ensures focused efforts, through KPI-driven
targets, to optimise our packaging and reduce its
environmental impact and mitigate the impact
of the tax on non-recyclable packaging. This
is achieved by using materials from certified
sustainable sources wherever possible, increasing
our use of recycled materials, and increasing
the recyclability of our packaging. 96% of our
packaging, by weight, is recyclable at year-end.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

3 Market and retailer actions

Risk and potential impact
As a primarily UK-based company, our sales
are concentrated, predominately with a
number of major customers who operate in a
highly competitive market. Maintaining strong
relationships with our existing customers and
building relationships with new customers
and technology-enabled channels are critical
for our brands to be readily available to our
consumers. A failure to do this may impact our
ability to obtain competitive pricing and trade
terms and/or the availability and presentation
of our brands. Actions taken by these retailers
(for example, changes in pricing and promotion
strategies), may negatively impact our financial
performance and can also have an impact on
the overall market for our products.

4 Operational integrity

Risk and potential impact
Delivery of our strategy depends on our
ability to minimise operational disruption
from issues with facilities, factory
infrastructure as well as Procurement and
Logistics functions. Supplier failure, market
shortage or an adverse event in our supply
chain impacts the sourcing of our products,
and the cost of our products is significantly
affected by commodity price movements.

Link to strategy

How we manage it
• We have strong relationships with the major

retailers built on the strength of our brands, our
expertise in our categories and shopper insight.
• We have a programme of continuous innovation

rooted in consumer insights and designed to build
category growth.

Changes since FY21/22
• The risk profile remained stable year-on-year.
• We continued to work with all our customers,
including category partnerships and range
reviews, to match our product offering to
consumer needs, particularly with more meals
eaten at home.

• We develop commercial plans with customers that

• We recorded growth in branded sales as a result

include investment and activation plans.

• We are growing our international business by

applying our proven UK branded growth model
strategy in target markets, which in time will
reduce dependence on the UK market.

• We are investing to build our online channel

presence and capabilities.

of our strong innovation pipeline, sustained brand
investment and close customer partnerships.

• We continued to focus on presenting our

brands well online, which helped drive growth
ahead of the market.

• Our international business continued to grow
thanks to progress in all the Group’s strategic
markets: Ireland, Australia, the USA and Europe.

Risk trend 

Link to strategy

How we manage it
• We have business continuity and disaster recovery

Changes since FY21/22
• The risk profile has remained stable during

management processes in place. These are
reviewed and refreshed on an ongoing basis.
• Appropriate insurance coverage is in place to
mitigate the financial impact of material site
issues.

the year.

• Our suppliers have continued to supply us with
raw materials and bought-in finished goods,
aided by accurate demand forecasting providing
forward views of requirements.

• We have an appropriately resourced and skilled

• Our Procurement, Operational and Technical

procurement function that possesses the requisite
market and industry knowledge to pinpoint raw
material market developments.

teams have also managed to source alternative
suppliers for key ingredients where there were
potential interruptions to supply.

• Procurement category plans are in place to

• Our factories continued to maintain production

mitigate against single supplier risk.

• Cross-functional teams help to manage any
sourcing challenges because of broader
macroeconomic factors.

• We have robust quality management standards
applied and rigorously monitored across our
supply chain.

• We have an ongoing three-year programme (in
conjunction with our insurers) to move our sites
into a ‘Highly Protected Risk’ status.

• ELT reviews resourcing plans to ensure appropriate
labour availability across factories, warehouse and
transport.

levels through careful management of
production capacity and through sourcing and
retaining a reliable pool of labour.

• We improved our operational resilience through
various initiatives, including Capex projects
that replace existing plant and machinery and
provide increased reliability and efficiency. See
further detail in our ‘Supply Chain Investment’
strategic pillar on page 18.

• We continue to maintain high levels of

customer service through our KPI monitoring of
key suppliers, despite the disruptions caused in
some of our key raw materials markets.

Strategy pillars

Continue to grow the UK core

Build international businesses with critical mass

Supply chain investment

Inorganic opportunities

Expand UK into new categories

Risk trend 

Risk trend

 Increase

 No change

 Decrease

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSRisk management

CONTINUED

Link to strategy

Changes since FY21/22
• The risk remained stable year-on-year.
• We have included disclosures on pages 38
to 48 of this report to comply with TCFD
recommendations.

• Our risk management framework continues to
be enhanced to accommodate and report on
climate risks and appropriate disclosures in line
with TCFD recommendations.

Risk trend 

Link to strategy

Changes since FY21/22
• The risk has remained stable year-on-year as we
continue to make progress against the targets
we have set for ourselves under our Enriching
Life Plan, and required of us under TCFD.
• Please refer to pages 32 and 33 for an update
on our Enriching Life Plan, pages 38 to 48 for
our TCFD statement and pages 178 to 183 for
our Enriching Life Plan disclosure tables.

Risk trend 

5 Legal compliance

Risk and potential impact
Our business is subject to many legal and
regulatory requirements and must continuously
monitor new and emerging legislation
(domestic and international), in areas such as
Health and Safety, listing rules, competition
law, intellectual property, food safety, labelling
regulations and environmental standards. We
have also adopted the recommendations of
the Financial Stability Board’s Task Force on
Climate-related Financial Disclosures (‘TCFD’).
A more detailed overview of the impact of
climate change on our business can be found in
the TCFD section on pages 38 to 48.

6 Climate risk

Risk and potential impact
Climate change has the potential to dramatically
change the world in which we live and operate.
Tackling climate change, by taking measures
to limit its impact to manageable levels, has
become a key priority for governments and
businesses. As the impacts of climate change
become clearer, businesses are looking to
understand how this will impact their operations.
Through our work to disclose against the
requirements of the Task Force for Climate-
related Financial Disclosures (TCFD), we have
identified risks and opportunities associated with
operational disruption, ingredients sourcing,
energy pricing, policy changes and changing
consumer behaviour.

How we manage it
• We have dedicated Legal and Regulatory teams in
place to monitor laws and regulations to ensure
compliance, protect intellectual property and
defend against litigation, where necessary.
• We work closely with our external advisors
and the regulators, government bodies and
trade associations regarding current and future
legislation which would impact the Group.
• Whistleblowing processes are in place that are
routinely tested to ensure that they are fit for
purpose.

• We have leading food industry processes in place
to manage health and safety and food safety
issues (including an ongoing programme of
internal and external audits).

• Regular mandatory compliance-related training

is in place covering areas such as data protection,
anti-bribery and corruption, Corporate Criminal
Offence, anti-trust etc.

• As previously described, our ESG Committee

oversees various initiatives, including compliance
with TCFD recommendations.

How we manage it
• Our decarbonisation targets have been submitted
to, and approved by, the Science-Based Targets
initiative (SBTi) and are embedded within our
Enriching Life Plan. We track progress against our
targets in line with our commitments.

• An assessment of the physical risks associated

with more extreme weather across the Company’s
manufacturing sites has been carried out in
partnership with our insurance partners, with
investments made at our Lifton site to reduce the
risk and impact of river flooding.

• An assessment of the risk of changes in the

availability, price or quality of key ingredients,
as a result of chronic changes in the climate in
key sourcing regions has been carried out and
mitigating actions to reduce the risk of supply
issues on key commodities have been identified.
• An assessment of the risk associated with changes
in the demand for our products in the event of
changing weather patterns has been carried
out and considered as part of our commercial
planning.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023 7 Technology

Risk and potential impact
A successful cyber-attack, or other systems
failure, could result in us not being able to
manufacture or deliver products, plan our
supply chain, pay and receive money, or
maintain proper financial control. This could
have a major customer, financial, reputational
and regulatory impact on our business.

8 Product portfolio

Risk and potential impact
Consumer preferences, tastes and behaviours
change over time. As part of this, the
consumers’ desire for healthier choices and
premiumisation are significant trends. Our
ability to anticipate these trends, innovate and
ensure the relevance of our brands are critical
to our competitiveness in the marketplace and
our performance. Furthermore, sales of many
of the Company’s products can be adversely
affected by seasonal weather conditions. We
may fail to successfully evolve our portfolio
to take advantage of growth categories
and/or re-invent our core brands to meet
consumer needs.

How we manage it
• Our centrally governed IT function continually
monitors known and emerging threats with
incident response plans in place to manage/
eliminate these risks.

• This includes maintaining firewalls and threat
detection and response systems with regular
penetration testing performed.

• Disaster recovery plans across the Group are

reviewed and tested.

• Information and IT policies are in place and

are regularly reviewed. Compulsory IT training
is regularly run including internal phishing
awareness campaigns to validate that learning is
embedded throughout the organisation.
• Our cyber-security strategy and actions are

regularly monitored by the Audit Committee and
the Board.

• We review our cyber-insurance coverage on a

regular basis.

How we manage it
• The Group offers a broad range of branded

products across a range of categories and markets
which offer a wide choice to the end consumer.
• We perform continual assessments of consumers

and customer trends and have an insights
programme in order to anticipate changes in
consumer preferences and evolve our product
offerings accordingly.

• We continue to invest heavily in new product
development with well-established stage gate
controls to ensure we continue to adjust to
consumers’ requirements.

• We continue to review the impact of weather on
sales during our monthly product performance
reviews.

Link to strategy

Changes since FY21/22
• The risk profile has remained stable during the
year as we continue to invest in our IT systems
to remain protected and match the ever-
increasing number and diversity of external
security threats.

Risk trend 

Link to strategy

Changes since FY21/22
• The risk remained stable year-on-year.
• The specific impact of inflationary pressure on
our consumers (Risk 1) and the introduction
of HFSS and other regulations (Risk 2) is
discussed above.

Risk trend 

Strategy pillars

Continue to grow the UK core

Build international businesses with critical mass

Supply chain investment

Inorganic opportunities

Expand UK into new categories

Risk trend

 Increase

 No change

 Decrease

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTS
Risk management

CONTINUED

9 HR and employee risk

Risk and potential impact
The ongoing success of the Group is dependent
upon attracting and retaining high-quality
colleagues at all levels who can effectively
implement the Group’s strategy. Due to
economic uncertainty and change (Risk 1),
there is a dual risk that the supply of labour
may be, in certain areas, constrained and, in
addition, the cost of labour could increase
resulting in additional financial and operational
pressure on the Group.

Link to strategy

Changes since FY21/22
• The risk profile remained stable year-on-year.
• We continue to maintain a strong commercial
focus on process and cost improvement to
manage and mitigate the increased cost of
labour.

• In addition, we maintain Group-wide

communication tools as well as hold quarterly
Town-Hall meetings to ensure colleagues are
briefed on new strategic initiatives that will
grow the Company.

Risk trend 

How we manage it
• We continue to invest in colleague development

and engagement initiatives on a focused basis. See
‘Our People’ on pages 34 and 35.

• We have processes in place to attract diverse talent
into the business with the right capabilities and
behaviours through our ‘in-house’ team.

• We have succession plans in place to retain and

progress our internal talent pipeline.

• We have a well-established and successful graduate
recruitment and development programme and
invest heavily in apprenticeship training.
• We benchmark pay to make sure we remain

competitive in the market and, where appropriate,
make changes to our offering.

• Regular engagement surveys take place across the
Company to obtain feedback from our colleagues.

10 Strategy delivery

Risk and potential impact
Our branded growth model, as set out on
pages 12 and 13, is at the core of what we
do. The strategy focuses on leveraging our
strong brands through launching insight-driven
new products, delivering sustained levels of
marketing investment, and fostering strong
retail and customer partnerships. In addition,
we seek bolt-on acquisitions where we can
leverage strong synergies with our existing
categories to enable us to further accelerate our
growth. Failure to timely deliver our strategy
may result in taking longer than expected to
deliver results, which may impact the speed at
which we can deliver shareholder value.

Link to strategy

How we manage it
• Given the seasonal nature of many of our brands,
media investment is targeted in periods of peak
consumer demand and through the most cost-
effective channels.

• Our new and existing product development
programmes are based on deep consumer
insight and continue to make our product ranges
more relevant to the ever-changing lives of our
consumers.

• Our strong strategic relationships with our

key customers facilitate the creation and joint
ownership of plans for mutual growth.

Changes since FY21/22
• The risk profile remained stable during the year.
• Following The Spice Tailor acquisition, we have
followed a rigorous integration programme to
ensure the benefits of the acquisition are fully
realised.

• Our branded growth strategy for delivering new
product innovation based on consumer trends
together with high-quality advertising behind
our major brands continues to deliver.

• We continued to leverage our branded growth

model in the Group’s strategic markets.

Risk trend 

Strategy pillars

Continue to grow the UK core

Build international businesses with critical mass

Supply chain investment

Inorganic opportunities

Expand UK into new categories

Risk trend

 Increase

 No change

 Decrease

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Viability statement

The directors, in accordance with provision 31
of the UK Corporate Governance Code 2018,
have assessed the viability of the Group,
taking into account the current financial
position, the Group’s strategic and financial
plan, and the potential impact on profitability,
liquidity and key financial ratios of the
principal risks documented on pages 60 to
66. These factors have also been carefully
assessed in light of the current global political
uncertainty driven by the conflict in Ukraine,
inflationary pressures across the industry and
the cost of living crisis.

The directors have determined that five
years is the most appropriate period to
assess viability over, this time frame is
consistent with the way the Board now
views the development of the business
over the medium-term, and is appropriate
for both business planning and measuring
performance. The directors also considered
the consistent business performance, nature
of the Group’s activities and the degree to
which the business changes and evolves,
given the dynamic nature of the FMCG
sector, when determining the assessment
period.

In order to report on the viability of the
Group, the directors reviewed the overall
funding capacity and headroom available
to withstand severe but plausible events
and carried out a robust assessment of
the principal and emerging risks facing the
Group, including those that would threaten
its business model, future performance,
solvency or liquidity. This assessment also
included reviewing mitigating actions in
respect of each principal risk.

The starting point for the viability assessment
is the Group’s strategic plan, which was
updated and signed off by the Board in
February 2023. Sensitivity analysis was
applied to this base financial information and
the projected cash flows were stress tested
against a number of severe but plausible
scenarios, the viability assessment being an
extension of the going concern assessment
(see note 2.1 of the financial statements).
As of 1 April 2023, £175m of committed
borrowing facilities available to the Group
were undrawn, the covenants linked to the
facilities are shown in note 20 of the financial
statements. The Board reviewed the level of
performance that would cause the Group to

breach its debt covenants and considered
all of the principal risks, focusing on those
which have the potential to materially
reduce Trading profit or adversely impact
the Group’s liquidity. The risks considered to
have the greatest potential impact have been
modelled in the downside scenarios, further
detail of which are shown in the table on
page 68.

Consideration has been given to the impact
of climate change which identified an
increase in costs of external specialists,
capital investment and regulatory
requirement within the assessment period,
best estimates for which are included in the
Group’s strategic plan and a sensitivity was
modelled as discussed above. An in-depth
assessment of climate risk is progressing,
providing greater insight into such risk, and
while this work remains ongoing it is not
believed that the climate-related risks would
have a significant impact on the business
within the five-year viability review period.
See pages 38 to 48 for an overview of the
work related to TCFD.

Premier Foods plcwww.premierfoods.co.ukOVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSViability statement

CONTINUED

In assessing the Group’s viability, the Board
also considered all the severe but plausible
scenarios simultaneously materialising
and for a sustained period, in conjunction
with mitigating actions such as reducing
discretionary costs and capital investment.
The likelihood of the Group having
insufficient resources to meet its financial
obligations and breach its covenants is
unlikely under this scenario.

In addition, a reverse stress test was
conducted to identify the magnitude of
Trading profit decline required before the
Group breaches its debt covenant, which
indicates that a Trading profit decline
of broadly half in each year of the five-
year review period is required to breach
covenants, which is considered extreme
and not plausible.

Based on this assessment, the Board
confirms that it has a reasonable expectation
that the Group will be able to continue in
operation and meet its liabilities as they fall
due over the five-year period to 1 April 2028.

Risk scenarios modelled

Action taken

Materials, packaging,
utilities and supply
chain inflation in the
market place.*

A cyber-attack shuts
down the operating
systems temporarily
stopping production.*

Climate change:
impact on revenue.*

Managing human
resources in response
to unplanned events.*

Retailer strategy results
in margin dilution.*

We have modelled further inflation
in the market place, increasing
input costs, we have assumed that
this is not all recovered with an
adverse impact on volume and
margin.

We have modelled production
stopping at all manufacturing
sites for two weeks in the viability
review period, with the associated
loss of sales due to the halt in
production, and taking into account
the levels of stock held.

We have modelled the expected
reduction in revenue anticipated
if Representative Concentration
Pathway (‘RCP’) 8.5 were followed.

We have modelled disruption
to our supply chain due to the
outbreak of an infectious disease
which drives labour shortages
or outbreaks leading to half of
our manufacturing sites being
closed for a one-week period on
two occasions during the review
window, including the associated
loss of sales, and taking into
account the levels of stock held.

We have modelled a reduction in
gross margin for our UK business
over the viability review period.

* Risk impact included in the Going Concern 12-month review period.

Link to principal risks
(on pages 60 to 66)

1 3 4

6 7

4 7 9

1 3 10

The strategic report, set out on pages 08 to 68, has been approved by the Board.
By order of the Board

Simon Rose
General Counsel & Company Secretary
18 May 2023

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Governance

IN THIS SECTION

Governance framework

Board of directors

Governance overview

Nomination Committee report

Audit Committee report

Directors’ Remuneration report

Other statutory information

Statement of directors’ responsibilities

115

118

Premier Foods plc
www.premierfoods.co.uk

Governance framework

How our Governance framework supports the delivery of the Group’s strategic objectives
Our governance framework facilitates effective, entrepreneurial and prudent management that promotes the long-term success of the
Group, generates value for shareholders and contributes to all our stakeholders whether customers, consumers, suppliers, employees, the

Shareholders

Shareholders and other stakeholders

Board

Chair
The Chair is responsible for the leadership
of the Board, ensuring its effectiveness and
promoting the highest standards of corporate
governance. He chairs Board meetings,
ensuring timely and accurate distribution of
information and full review and discussion of
agenda items.

Senior Independent Director
The Senior Independent Director (SID)
supports the Chair and leads the non-
executive directors in the oversight of the
Chair. He is also available to shareholders,
if they have concerns that cannot be raised
through normal channels.

Committees

Nomination Committee
Responsible for Board appointments, succession planning and reviewing the structure, size and
composition of the Board, ensuring that there is a healthy balance of skills, knowledge, experience
and diversity on the Board. Provides oversight of Inclusion and Diversity, talent management and
succession planning for the wider Group.

→ Further information can be found on pages 82 to 84

Company
Secretary and
Internal Audit

Company Secretary
The role of the Company Secretary is to ensure that there is an effective flow of information
between executive management and the Chair and NEDs. The Company Secretary also advises
the Board on legal and governance matters and supports the Board evaluation process
and induction programme.

Executive
Leadership Team
(ELT)

The Board delegates day-to-day responsibility for managing the business to the ELT and its
sub-committees. The ELT comprises of the heads of the commercial business units and key
corporate functions. The ELT meets on a monthly basis, with weekly follow ups. Members of the
ELT also regularly present to the Board.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Shareholders and other stakeholders

government or wider society. The Board of directors is responsible for the governance of the Group, including setting the Group’s purpose,
values, the approach to ESG matters and strategy. It provides the leadership to put them into effect, supervising the management of the
business, monitoring performance, and reporting to shareholders on their stewardship.

Non-executive
directors (‘NEDs’)
The NEDs bring a range of
knowledge and experience
to the Board. Their role is
to use their experience,
objectivity and sound
judgement to scrutinise
and challenge executive
management’s plans and
performance and the
development of the Group’s
vision, values and strategy.

Workforce
Engagement NED
The Workforce Engagement
NED’s role is to engage
with colleagues across the
business to ensure their
views and concerns are
brought to the Board and
taken into account by the
directors, particularly when
they are making decisions
that could affect the
workforce.

Chief Executive
Officer (‘CEO’)
The CEO is responsible
for the day-to-day
management of the Group,
working with the Executive
Leadership Team to ensure
the implementation of the
agreed strategy.

Chief Financial Officer
(‘CFO’)
The CFO has responsibility
for developing and
implementing financial
and operational strategies,
financial risk management,
treasury, investor relations
and pensions strategy.

Audit Committee
Monitors the integrity of the Group’s external reporting and
provides oversight and governance of the Group’s Internal Audit
team, internal controls, risk management and the relationship
with the external auditors. The committee also monitors
compliance with TCFD reporting regulations and provides
oversight of the Group’s whistleblowing procedures.

→ Further information can be found on pages 85 to 89

Remuneration Committee
Responsible for setting the Directors’ Remuneration Policy
and the remuneration for the Chair, executive directors and
senior management, to ensure that it is aligned with the
Group’s strategic objectives and culture, and oversight of the
remuneration of the wider workforce.

→ Further information can be found on pages 90 to 114

Internal Audit
Internal Audit is responsible for providing the Audit Committee and Board with independent assurance that the Group’s internal
control and risk management processes are operating effectively.

→ Further information can be found on pages 87 and 88

ESG Governance Committee
Chaired by the CEO and including
members of the ELT, the committee is
responsible for setting the Group’s ESG
strategy, monitoring performance and
ensuring ESG is embedded into the way
the business operates.

→ Further information can be found

on page 29

TCFD Steering Group
Responsible for assessing and managing
climate-related risks and opportunities
and embedding the TCFD framework
across the business.

Inclusion and Diversity
Steering Group
Responsible for implementing and
reviewing the Group’s approach to
inclusion and diversity.

→ Further information can be found

on page 39

on pages 15

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWBoard of directors

Colin Day
NON-EXECUTIVE CHAIR

Alex Whitehouse
CHIEF EXECUTIVE OFFICER

Duncan Leggett
CHIEF FINANCIAL OFFICER

Appointed to the Board
August 2019 (appointed Nomination
Committee Chair in August 2019)

Skills and experience
Colin retired as Chief Executive of Essentra
plc in 2017, was previously Chief Financial
Officer at Reckitt Benckiser plc for over 10
years and, prior to that, at Aegis Group plc.
He has served as a non-executive director
on the boards of major UK plcs, including
Amec Foster Wheeler, WPP, Cadbury,
Imperial Brands, easyJet, and Meggitt.

Colin is currently a board member of the
Department for Environment, Food and
Rural Affairs (Defra) and chairs the Defra
Audit and Risk Assurance Committee. He is a
non-executive director and Audit Committee
Chair at Euromoney Institutional Investor
plc and S4 Capital plc and a non-executive
director of FM Global. He is also a member
of the Board and Finance Committee of
Cranfield University.

Colin is a Fellow of the Association of
Chartered Certified Accountants and has an
MBA from Cranfield School of Management.

Appointed to the Board
August 2019

Appointed to the Board
December 2019

Appointed to the Board

May 2020

Appointed to the Board

March 2022

Skills and experience
Alex joined the Company in July 2014
and was appointed Managing Director
of the Grocery Strategic Business Unit in
September 2014. He was promoted to UK
Managing Director in April 2017. Alex has
significant senior international, marketing,
sales, strategy, innovation and general
management experience gained across
multiple geographies. He spent 18 years
with Reckitt Benckiser plc, where he held
senior leadership roles, including Managing
Director, New Zealand and Worldwide Head
of Shopper and Customer Marketing. Earlier
in his career, he held a number of retail
management positions with Whitbread plc.

Skills and experience
Duncan joined the Company in September
2011 and has held a number of senior
roles within finance, including Group
Financial Controller and, most recently,
Director of Financial Control and Corporate
Development. Prior to joining the Company,
Duncan spent nine years at KPMG,
working with clients across a variety of
industries. Duncan’s responsibilities include
operational and corporate finance, corporate
development, investor relations and pensions.
He is a qualified Chartered Accountant.

Skills and experience

Tim has nearly 40 years’ experience in

Skills and experience

Tania has extensive senior executive

investment banking and corporate finance,

experience from her roles across global

advising a wide range of companies

and industries, particularly those in the

consumer and retail sectors. During his

FMCG businesses. Until 2017, she was

Chief Operating Officer of Nomad Foods, a

European frozen foods business listed on the

career, Tim held Managing Director roles at

NYSE, with household brands such as Birds

both Barclays Capital and JP Morgan and,

Eye, Findus and Iglo. During her 10-year

more latterly, was a Partner and Consultant

tenure, she had responsibility for Supply

at KPMG. Tim has deep knowledge and

experience of capital markets and is

currently Senior Advisor at Alvarez &

Marsal LLP.

Chain, Quality, HR, IT and M&A integration.

Prior to this, Tania was CIO for Coca-Cola’s

European and African businesses and spent

nine years at Walkers Snack Foods, latterly

as CIO. Tania is currently non-executive

Chair of Ozo Innovations Ltd, a sustainable

hygiene solutions company, an advisor to

the Private Equity business within Goldman

Sachs Asset Management, and a member of

the Technology Advisory Board at NatWest

Group plc.

Appointed to the Board

May 2020 (appointed Workforce

Engagement NED in September 2020

and Remuneration Committee Chair in

July 2022)

Skills and experience

Helen brings 35 years of commercial and

general management experience for FMCG

and multi-site consumer businesses. During

her executive career, Helen was previously

Group Executive Director of Caffe Nero

Group Ltd and Managing Director of Zizzi

restaurants. Prior to this, Helen spent nine

years at Unilever and was the successful

architect for the launch of the Ben & Jerry’s

brand in the UK and Europe. Helen is

currently non-executive director and Senior

Independent Director of Halfords plc and

non-executive director and Remuneration

Committee Chair of Fuller, Smith & Turner

plc and Virgin Wines UK PLC.

Richard Hodgson
SENIOR INDEPENDENT DIRECTOR

Simon Bentley
NON-EXECUTIVE DIRECTOR

Roisin Donnelly
NON-EXECUTIVE DIRECTOR

Appointed to the Board
January 2015 (appointed SID in
May 2019)

Appointed to the Board
February 2019 (appointed Audit
Committee Chair in March 2019)

Skills and experience
Richard is Chief Executive Officer of The
SnowFox Group and has over 20 years’
experience in the food industry. He was
previously Chief Executive Officer at Pizza
Express, a role he held for four years until
May 2017. In 2010, he was appointed
Commercial Director at Morrisons, a
newly created role, combining Trading and
Marketing. Richard joined Waitrose in 2006
as Commercial Director and, prior to that,
spent 10 years at Asda holding a number of
senior roles culminating in his appointment
as Marketing & Own Brand Director.

Skills and experience
Simon has over 30 years’ experience in
finance and retail, having previously served
as Chair and Chief Executive of Blacks
Leisure Group plc, Acting Chair/Senior
Independent Director of Frasers Group
plc (formerly Sports Direct International
plc), Chair of Umberto Giannini, and
Deputy Chair of Mishcon de Reya. Earlier
in his career, Simon spent 10 years with
accountancy firm Landau Morley, latterly
as a Senior Partner. Simon is also Chair of
Gingerbread, the leading national charity
working with single parent families. He is a
qualified Chartered Accountant.

Appointed to the Board
May 2022

Skills and experience
Roisin has over 30 years’ marketing and
brand building experience, gained at Procter
and Gamble, where she was responsible
for a large portfolio of leading consumer
brands within the UK, Europe, EMEA and
the Americas, during a varied career.
Most recently, she spent 12 years as Chief
Marketing Officer, UK and Ireland, and then
two years in the same role for Northern
Europe before leaving the Company in
2016. Roisin has served as a non-executive
director of Just Eat plc, Holland & Barrett
Ltd, Homeserve plc and Bourne Leisure Ltd.
She is currently a non-executive director of
NatWest Group plc and Sage Group Plc and
a member of the Digital Advisory Board of
Coca-Cola Europacific Partners.

Appointed to the Board

March 2021

Appointed to the Board

April 2022

Skills and experience

Yuichiro is Head of Business Development,

Lorna has extensive experience as an equity

Deputy General Manager (Corporate

Planning Division) of Nissin Foods

Holdings Company Limited (‘Nissin’)

and is responsible for devising Nissin’s

M&A strategy, as well as originating and

analyst covering the media sector and an

investment banker with strong financial

analysis and leadership skills. During

her career, Lorna was executive director

and Head of the Media Sector at Numis

executing business alliance and investment

Corporation PLC until her retirement in

transactions. Prior to joining Nissin, in

2018. She was a founder of Numis when

September 2016, he was Vice President at

it launched in 2001, having previously

the Investment Banking Division of Goldman

worked at Sheppards as a director at SG

Sachs Japan Co., Ltd. During his nine

years at the firm, his key responsibilities

included execution of global equity/debt

Warburg and an executive director of

WestLB Panmure. Lorna is executive Chair

of Dowgate Capital Ltd, sits on the Board of

financing transactions, as well as coverage

Dowgate Wealth Ltd and is a non-executive

of corporate clients across multiple industry

director of Rightmove plc, Finsbury Growth

& Income Trust plc and ProVen VCT plc.

sectors, including technology, steel and

natural resources. Yuichiro received a

BA in Economics from Keio University in

2001 and an MBA from the University of

Chicago in 2007.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Tim Elliott
NON-EXECUTIVE DIRECTOR

Tania Howarth
NON-EXECUTIVE DIRECTOR

Helen Jones
NON-EXECUTIVE DIRECTOR

Appointed to the Board

August 2019 (appointed Nomination

Committee Chair in August 2019)

Skills and experience

Colin retired as Chief Executive of Essentra

plc in 2017, was previously Chief Financial

Officer at Reckitt Benckiser plc for over 10

years and, prior to that, at Aegis Group plc.

He has served as a non-executive director

on the boards of major UK plcs, including

Amec Foster Wheeler, WPP, Cadbury,

Imperial Brands, easyJet, and Meggitt.

Colin is currently a board member of the

Department for Environment, Food and

Rural Affairs (Defra) and chairs the Defra

Audit and Risk Assurance Committee. He is a

non-executive director and Audit Committee

Chair at Euromoney Institutional Investor

plc and S4 Capital plc and a non-executive

director of FM Global. He is also a member

of the Board and Finance Committee of

Cranfield University.

Colin is a Fellow of the Association of

Chartered Certified Accountants and has an

MBA from Cranfield School of Management.

Skills and experience

Alex joined the Company in July 2014

and was appointed Managing Director

of the Grocery Strategic Business Unit in

September 2014. He was promoted to UK

Managing Director in April 2017. Alex has

Skills and experience

Duncan joined the Company in September

2011 and has held a number of senior

roles within finance, including Group

Financial Controller and, most recently,

Director of Financial Control and Corporate

significant senior international, marketing,

Development. Prior to joining the Company,

sales, strategy, innovation and general

management experience gained across

multiple geographies. He spent 18 years

with Reckitt Benckiser plc, where he held

Duncan spent nine years at KPMG,

working with clients across a variety of

industries. Duncan’s responsibilities include

operational and corporate finance, corporate

senior leadership roles, including Managing

development, investor relations and pensions.

Director, New Zealand and Worldwide Head

He is a qualified Chartered Accountant.

of Shopper and Customer Marketing. Earlier

in his career, he held a number of retail

management positions with Whitbread plc.

Appointed to the Board

January 2015 (appointed SID in

May 2019)

Appointed to the Board

February 2019 (appointed Audit

Committee Chair in March 2019)

Skills and experience

Richard is Chief Executive Officer of The

SnowFox Group and has over 20 years’

experience in the food industry. He was

previously Chief Executive Officer at Pizza

Express, a role he held for four years until

May 2017. In 2010, he was appointed

Commercial Director at Morrisons, a

Skills and experience

Simon has over 30 years’ experience in

finance and retail, having previously served

as Chair and Chief Executive of Blacks

Leisure Group plc, Acting Chair/Senior

Independent Director of Frasers Group

plc (formerly Sports Direct International

plc), Chair of Umberto Giannini, and

newly created role, combining Trading and

Deputy Chair of Mishcon de Reya. Earlier

Marketing. Richard joined Waitrose in 2006

in his career, Simon spent 10 years with

as Commercial Director and, prior to that,

accountancy firm Landau Morley, latterly

spent 10 years at Asda holding a number of

as a Senior Partner. Simon is also Chair of

senior roles culminating in his appointment

Gingerbread, the leading national charity

as Marketing & Own Brand Director.

working with single parent families. He is a

qualified Chartered Accountant.

Appointed to the Board

May 2022

Skills and experience

Roisin has over 30 years’ marketing and

brand building experience, gained at Procter

and Gamble, where she was responsible

for a large portfolio of leading consumer

brands within the UK, Europe, EMEA and

the Americas, during a varied career.

Most recently, she spent 12 years as Chief

Marketing Officer, UK and Ireland, and then

two years in the same role for Northern

Europe before leaving the Company in

2016. Roisin has served as a non-executive

director of Just Eat plc, Holland & Barrett

Ltd, Homeserve plc and Bourne Leisure Ltd.

She is currently a non-executive director of

NatWest Group plc and Sage Group Plc and

a member of the Digital Advisory Board of

Coca-Cola Europacific Partners.

Appointed to the Board

August 2019

Appointed to the Board

December 2019

Appointed to the Board
May 2020

Appointed to the Board
March 2022

Skills and experience
Tim has nearly 40 years’ experience in
investment banking and corporate finance,
advising a wide range of companies
and industries, particularly those in the
consumer and retail sectors. During his
career, Tim held Managing Director roles at
both Barclays Capital and JP Morgan and,
more latterly, was a Partner and Consultant
at KPMG. Tim has deep knowledge and
experience of capital markets and is
currently Senior Advisor at Alvarez &
Marsal LLP.

Skills and experience
Tania has extensive senior executive
experience from her roles across global
FMCG businesses. Until 2017, she was
Chief Operating Officer of Nomad Foods, a
European frozen foods business listed on the
NYSE, with household brands such as Birds
Eye, Findus and Iglo. During her 10-year
tenure, she had responsibility for Supply
Chain, Quality, HR, IT and M&A integration.
Prior to this, Tania was CIO for Coca-Cola’s
European and African businesses and spent
nine years at Walkers Snack Foods, latterly
as CIO. Tania is currently non-executive
Chair of Ozo Innovations Ltd, a sustainable
hygiene solutions company, an advisor to
the Private Equity business within Goldman
Sachs Asset Management, and a member of
the Technology Advisory Board at NatWest
Group plc.

Yuichiro Kogo
NON-EXECUTIVE DIRECTOR

Lorna Tilbian
NON-EXECUTIVE DIRECTOR

Appointed to the Board
March 2021

Appointed to the Board
April 2022

Skills and experience
Yuichiro is Head of Business Development,
Deputy General Manager (Corporate
Planning Division) of Nissin Foods
Holdings Company Limited (‘Nissin’)
and is responsible for devising Nissin’s
M&A strategy, as well as originating and
executing business alliance and investment
transactions. Prior to joining Nissin, in
September 2016, he was Vice President at
the Investment Banking Division of Goldman
Sachs Japan Co., Ltd. During his nine
years at the firm, his key responsibilities
included execution of global equity/debt
financing transactions, as well as coverage
of corporate clients across multiple industry
sectors, including technology, steel and
natural resources. Yuichiro received a
BA in Economics from Keio University in
2001 and an MBA from the University of
Chicago in 2007.

Skills and experience
Lorna has extensive experience as an equity
analyst covering the media sector and an
investment banker with strong financial
analysis and leadership skills. During
her career, Lorna was executive director
and Head of the Media Sector at Numis
Corporation PLC until her retirement in
2018. She was a founder of Numis when
it launched in 2001, having previously
worked at Sheppards as a director at SG
Warburg and an executive director of
WestLB Panmure. Lorna is executive Chair
of Dowgate Capital Ltd, sits on the Board of
Dowgate Wealth Ltd and is a non-executive
director of Rightmove plc, Finsbury Growth
& Income Trust plc and ProVen VCT plc.

Appointed to the Board
May 2020 (appointed Workforce
Engagement NED in September 2020
and Remuneration Committee Chair in
July 2022)

Skills and experience
Helen brings 35 years of commercial and
general management experience for FMCG
and multi-site consumer businesses. During
her executive career, Helen was previously
Group Executive Director of Caffe Nero
Group Ltd and Managing Director of Zizzi
restaurants. Prior to this, Helen spent nine
years at Unilever and was the successful
architect for the launch of the Ben & Jerry’s
brand in the UK and Europe. Helen is
currently non-executive director and Senior
Independent Director of Halfords plc and
non-executive director and Remuneration
Committee Chair of Fuller, Smith & Turner
plc and Virgin Wines UK PLC.

Committee membership

Audit Committee

Remuneration Committee

Nomination Committee

Committee Chair

Independent

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWGovernance overview

Chair’s introduction
Dear shareholder,
On behalf of the Board, I would like to
introduce the Group’s corporate governance
statement for FY22/23.

Board leadership
The Board leads the Group’s governance
structure. It provides stewardship of the
Company with the purpose of safeguarding
its long-term sustainable success, creating
value for the Group’s shareholders and other
stakeholders, and enabling the Group to make
a positive contribution to the communities
and wider societies in which it operates.

Purpose, values and culture
One of the Board’s responsibilities is to
assess and monitor culture and behaviours
throughout the organisation, to ensure
these are aligned with the Group’s strategy.

We continue to make progress with
embedding the Group’s purpose and values
across the business; increasing investment
in communication and engagement with
colleagues; and up-weighting training in
areas such as leadership and Inclusion and
Diversity. We monitor progress through
regular HR updates, Group-wide colleague
surveys, site visits by the Board, issues
raised in whistleblowing helpline calls,
colleague retention levels and through the
work of the Workforce Engagement NED.

The Board reviewed the Group’s purpose,
values, strategy and culture as part of the
review and approval of the Group’s five-year
strategic plan in February 2023; the Board’s
effectiveness in monitoring the culture and
behaviours throughout the organisation
was also considered as part of this year’s
external Board evaluation and rated
positively.

Group strategy
The Board has an important role to play
in reviewing and approving the Group’s
strategy, and in providing effective oversight
of the implementation of the key elements
of the strategy, in order to deliver long-term
sustainable growth. Over the year, the Board
has reviewed the Group’s five-year strategic
plan, the key steps to deliver the stretching
growth plans and the organisational design
needed to implement it.

Changes made to the structure of meetings
and agenda items last year have aided focus
on the delivery of the Group’s strategic
priorities. The changes have resulted

in enhancing the balance of time spent
reviewing operational performance and
allowed more time for forward-looking
matters, such as innovation, investment and
growth initiatives. In addition, in light of
the increased size of the Board, committee
membership was reviewed, and the changes
made took effect from the end of the 2022
AGM. The new committee memberships are
set out on the opposite page.

ESG strategy and climate risks
The Board has overall responsibility for the
Group’s ESG strategy and oversight of the
climate-related risks the business faces as a
leading UK food producer.

In 2021, the Board approved a strengthened
ESG strategy, the Enriching Life Plan, which
is focused on three areas: Product, Planet
and People. The Board delegates day-to-day
management of the ESG strategy to the ESG
Governance Committee, which is chaired by
the CEO and is supported by the ESG Director,
members of the ELT and subject matter
experts from across the Group. Regular
updates are provided by the CEO. The Board
reviews ESG strategy on a biannual basis and
progress against ESG targets are reported at
each scheduled Board meeting.

Climate-related risks are incorporated into
the Group’s Enterprise Risk Management
framework. This ensures a bottom-up
approach to identifying and quantifying
risks for prioritisation, as well as oversight
through appointed members of the ELT, the
Audit Committee and, ultimately, the Board.
In addition, the ESG Governance Committee
oversees the TCFD Steering Group, which
is responsible for embedding the TCFD
framework across the business. ESG matters
and climate risks are considered by the
Board when making key decisions as part of
its responsibility to consider matters under
Section 172 of the Companies Act.

Governance, risk and internal control
The Board is responsible for the oversight
of risk and the effectiveness of the Group’s
system of internal control, including the
financial reporting process. In so doing,
it ensures that the necessary resources
are in place for the Company to meet its
objectives and to measure its performance.
The Board has an effective governance and
risk framework, which has been devised to
ensure that the Group is being operated and
managed appropriately, and that prudent
and effective controls are in place to identify
and manage or mitigate those risks.

During the year, the Board has undertaken a
robust assessment of the Group’s emerging
and principal risks.

The Board noted that the macro-economic
environment remained challenging and
has monitored the impact of elevated
levels of inflation on the business and key
stakeholders, such as consumers, customers,
colleagues and suppliers. The overall cyber
security landscape also remained an area
of elevated risk and the Board continued
to receive regular updates on the Group’s
IT strategy and management actions to
strengthen resilience. This included third-
party penetration testing of the Group’s
systems, a Group-wide cyber awareness
programme, investment in technology
infrastructure at manufacturing sites and
the strengthening of systems to support the
Group’s internal controls systems.

The Board has delegated authority for
monitoring risk management and internal
controls to the Audit Committee and
further information is set out on pages
87 to 88.

Workforce engagement
The Board and its committees receive
regular updates on workforce matters,
and this is a standing item reported to the
Board via regular HR reports. This includes
updates on key issues, such as site-based
pay negotiations, vacancies and recruitment,
the review of talent management and
succession plans, the results of periodic
employee engagement exercises and action
plans to address the issues raised.

These activities are enhanced by the work
of the Remuneration and Audit Committees,
which review remuneration arrangements
for the workforce across the business
and the issues raised via the Company’s
confidential whistleblowing helpline and
management’s response to them.

Helen Jones, as the Company’s Workforce
Engagement NED, has an important role
in fostering effective engagement with
the workforce to enable the Board to
be kept informed of the views of the
workforce, and ensure these views are
taken into consideration as part of the
Board’s decision-making process. ‘Voice
Forums’ have been established at all our
sites, facilitating two-way engagement
with colleagues across the business. During
the year, Helen attended these meetings
at various sites and the results were fed

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Board attendance
During the year, there were seven scheduled
meetings of the Board, four meetings of
the Audit Committee, five meetings of the
Remuneration Committee and two meetings
of the Nomination Committee. In addition,
a number of other Board and Committee
meetings and calls were convened for
specific business.

All directors are expected to attend the
AGM, scheduled Board meetings and
relevant Committee meetings, unless
they are prevented from doing so by prior
commitments. Where a director is unable to
attend a meeting, they have the opportunity
to read the papers and ask the Chair to raise
any comments.

They are also updated on key discussions
and decisions that were taken at the
meeting. Non-executive directors also
have the opportunity to meet without
management present.

Details of Board and Committee
membership, and attendance at scheduled
Board meetings and Committee meetings,
are set out in the table below.

All directors attended the AGM in 2022.
Lorna Tilbian was unable to attend one
Board meeting, Richard Hodgson was unable
to attend two Remuneration Committee
meetings and Roisin Donnelly was unable
to attend one Remuneration Committee
meeting, due to other business commitments,
which could not be rescheduled.

Executive directors
Alex Whitehouse
Duncan Leggett
Non-executive directors
Colin Day
Richard Hodgson
Simon Bentley
Roisin Donnelly
Tim Elliott
Tania Howarth
Helen Jones
Yuichiro Kogo
Lorna Tilbian

Board

Audit
Committee

Remuneration
Committee

Nomination
Committee

7/7
7/7

7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
6/7

–
–

–
1/1
4/4
3/3
4/4
4/4
1/1
–
–

–
–

–
3/5
1/1
3/4
5/5
1/1
5/5
–
–

–
–

2/2
2/2
1/1
–
1/1
2/2
1/1
–
2/2

Rosin Donnelly was appointed as non-executive director on 1 May 2022.

In light of the increased size of the Board, the structure of Committee membership
was reviewed and the following membership was put in place with effect from the
end of the 2022 AGM:

Nomination Committee
Colin Day (Chair)
Richard Hodgson
Tania Howarth
Lorna Tilbian

Audit Committee
Simon Bentley (Chair)
Roisin Donnelly
Tim Elliott
Tania Howarth

Remuneration
Committee
Helen Jones (Chair)
Roisin Donnelly
Tim Elliott
Richard Hodgson

back to the Board. Updates were provided
on the impact of the cost of living crisis
on lower-paid colleagues, recruitment
challenges for certain skilled roles and
the need for continued site investment.
Appreciation was noted for the cost of
living payments made to non-management
colleagues, the availability of products via
the ‘Company Store’ and the work being
undertaken at sites in regard to Inclusion
and Diversity and mental health support.

Compliance with the UK
Governance Code 2018
The Board supports the principles laid
down by the UK Governance Code 2018
(the Governance Code) as issued by the
Financial Reporting Council, which applies
to accounting periods beginning on, or after,
1 January 2019 (available at www.frc.org.uk).

The Company does not currently have a
formal post-employment shareholding
requirement (Provision 36), but is proposing
to introduce one as part of the new
Directors’ Remuneration Policy, which,
if approved by shareholders, will come
into effect following the AGM in 2023
(further details are set out in the Directors’
Remuneration report on page 91).

The Board considers that it has complied
with the requirements of the Governance
Code during the financial year, with the
exception of the matter highlighted above.

Annual General Meeting (AGM)
We understand the importance of the AGM
to shareholders and value the opportunity
to meet in person. We were, therefore,
pleased to be able to welcome our
shareholders in person to our AGM in 2022,
as well as offering the option of joining the
meeting remotely via webcast.

This year, we look forward to welcoming
shareholders in person once again to
the AGM, which will be held at our head
office, Premier House, Centrium Business
Park, Griffith’s Way, St Albans AL1 2RE, on
Thursday 20 July 2023 at 11.00 am. I look
forward to meeting with shareholders then.

Colin Day
Non-executive Chair

18 May 2023

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWGovernance overview

CONTINUED

Conflicts of interest
The Group has procedures in place for
managing conflicts of interest and directors
have continuing obligations to update the
Board on any changes to these conflicts.
This process includes relevant disclosure
at the beginning of each Board meeting as
well as the Group’s annual formal review of
potential conflict situations, which includes
the use of a questionnaire.

Under our Relationship Agreement with
Nissin (who held 24.9% of issued share
capital as at 1 April 2023), Nissin is entitled
to nominate an individual for appointment
to the Board. This is conditional upon
Nissin retaining an interest in shares in
the Company (representing 15% of issued
share capital). A summary of the principal
terms of the Relationship Agreement can
be found on the Company’s website. During
the period to 1 April 2023, no other director
had a material interest at any time, in any
contract of significance with the Company
or Group other than their service contract
or letter of appointment.

Induction
All directors receive a tailored induction on
joining the Board covering their duties and
responsibilities as directors. Non-executive
directors also receive a full briefing on all
key areas of the Group’s business and they
may request further information as they
consider necessary. A typical induction
would include meetings with Board
colleagues, the ELT and key management,
site visits and an induction on directors’
duties, key elements of the Listing Rules,
Disclosure and Transparency Regulations
and Market Abuse Regulation and the
operation of the Board and its Committees.

Board information
The main source of information provided
to directors is via the Board papers, which
are designed to keep directors up to date
with all material business developments
in advance of Board meetings. In addition,
training on specific issues is provided as and
when required. Non-executive directors
also meet with senior management outside
of Board meetings to discuss specific
areas of interest in more detail, e.g. brand
and marketing plans, customer strategy
and pension investment strategy. Board
papers, generally, contain the following
standing items: CEO business review; CFO
review (incorporating Investor Relations
and Treasury), Financial dashboard and
KPIs, Commercial and Performance review,
Health and Safety and ESG performance.
In addition, there are quarterly, biannual
and periodic updates on a range of matters,
such as Human Resources, diversity, talent
management, corporate affairs, commercial
performance, new product development,
customer service levels, operations and
logistics, ESG strategy, strategic projects,
and capital expenditure.

Terms of reference
During the year, the Board reviewed
the matters reserved for the Board, and
the terms of reference for each of its
committees, to update them with recent
developments in corporate governance
and best practice. The committees terms
of reference can be found on the Group’s
website.

Board allocation of time over
the year

20%

36%

29%

15%

Strategic development and
implementation:

Operational performance:

Financial performance and risk:

36%

15%

29%

Environmental, Social and Governance
(including colleagues and Health & Safety): 20%

(As at 1 April 2023)

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Key Board activities in the year
Set out below are details of the key areas of focus over the course of the financial period.

Strategic development and implementation

• Reviewed progress on the Group’s five-year strategic plan, the strategy to

implement this plan, and the Group’s business plans for the medium-term.

• Monitored the investment strategy, investment performance and
funding levels of the Group’s defined benefit pension scheme.

• Considered and approved an assessment of the viability of the

• Monitored the progress of key strategic projects.

Group’s Knighton factory.

• Received updates on customers and commercial execution.

• Approved the acquisition of The Spice Tailor group of companies.

• Reviewed NPD strategy and initiatives.

• Reviewed the Group’s property strategy.

Operational performance

• Monthly trading updates from the UK and international businesses.

• Received regular updates on external matters impacting the Group
including the elevated levels of inflation and the ongoing impact of
the cost of living crisis on the business and key stakeholders.

Financial performance and risk

• Approved the annual budget, re-forecasts and monthly management

• Reviewed key risks facing the business, including environmental risks,

accounts.

emerging risks and the risk appetite of the business.

• Continued to review the medium-term financing requirements of

• Reviewed cyber security and resilience of IT the Group’s strategy to

the Group.

enhance processes and procedures.

• Reviewed updates on the audit tender process and approved the

• Reviewed viability statement over the next three years.

appointment of the new auditor.

• Monitored the funding levels and investment strategy of the Group’s
defined benefit pension schemes, and approved an amendment to
the Group’s Pensions Framework Agreement.

• Approved the Half Year and Full Year results, and the Q1 and Q3

trading statements.

• Monitored trading performance and approved a trading update.

• Reviewed annual report to confirm it is fair, balanced and

understandable.

Governance and culture

• Reviewed diversity within the Board and for the wider Group.

• Engaged in and reviewed the feedback from the externally-facilitated

• Reviewed the Group’s medium-term plans for organisational

structure, to ensure it was aligned with, and supported, the Group’s
strategic plan and growth strategy.

Board and committee evaluations.

• Received updates from the Workforce Engagement NED.

• Reviewed governance best practice and the Governance Code.

Responsibility and sustainability

• Reviewed updates on the Group’s ESG Strategy, the Enriching Life Plan

• The Board reviewed updates regarding the Group’s approach to

and the targets set under each of the three pillars.

Health and Safety, product safety and trends and issues relating to
nutrition, modern day slavery, gender pay, Inclusion and Diversity and
plastic packaging.

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWGovernance overview

CONTINUED

Board and committee evaluation
The Board conducts a three-year rolling evaluation process, which normally follows the following format:

Year 1

Years 2 and 3

An externally facilitated evaluation is carried out to
assess the effectiveness of the Board, each committee
and the Chair. The input of each Board member is
kept confidential to foster open, honest and in-depth
feedback. A report is presented to the Board and an
action plan prepared.

An internally facilitated evaluation is managed by the Company Secretary.
A questionnaire is prepared by the Company Secretary, in conjunction with the
Chair, focusing on core responsibilities of the Board. It also builds on the key
development areas identified in the prior year. The input of each Board member
is kept confidential to foster open, honest and in-depth feedback. A report is
presented to the Board and an action plan is drawn up.

FY22/23 evaluation

This is the first year of the three-year rolling evaluation process and, therefore, an externally facilitated evaluation was undertaken by Lintstock,
(who have no other connection with the Company). Lintstock worked with the Company Secretary and Chair to devise comprehensive questionnaires
covering a wide range of areas. The review covered the Board, its Committees and the Chair, CEO and CFO, as well as the Board’s oversight of the
Group’s ESG strategy.

Lintstock created a report compiling the
feedback and presented this to the Board
with recommendations on areas of focus.
Following the review, the Board approved
an action plan to improve areas highlighted
by the evaluation over the forthcoming year.

Outcomes from the
FY22/23 evaluation
Overall, the responses to the Board and
Committee questions were very positive
and demonstrated that the Board had made
positive progress since the last external
benchmark undertaken by Lintstock.

Areas of strength that were highlighted
included the composition and diversity of
the Board, meeting management, Board
packs, reporting from Committee chairs,
oversight of corporate and ESG strategies,
and the understanding of stakeholder
matters. It was noted that the Board had a
strong focus on strategy and demonstrated
a collaborative and engaged mindset, and
that meetings were being conducted in a
positive and constructive way. The results
were also benchmarked against Lintstock’s
Governance Index to provide insight on the
Company’s performance relative to its peers.

Following the review, the Board agreed
that its focus over the next 12 months
should include:

• Strategy – Execution of the Group’s

ambitious strategic growth plans, with
a particular focus on international
expansion, M&A and infrastructure
investment.

• Innovation – Maintain focus on the new

product development.

• Consumers – Strengthen understanding

of consumer preferences and behaviours,
and how best to respond to them.

• Colleague matters – Continue to review

succession plans, the organisational design
needed to support the Group’s growth
strategy and continued focus on diversity.

• Risk – Monitor the risk landscape for

the business, including the inflationary
environment and its impact on
stakeholders (including suppliers,
customers and consumers) and the
continued need to monitor and, where
possible, mitigate cyber security risk.

Assessment of the
Chair’s performance
As part of the annual Board evaluation
process, Richard Hodgson, the Senior
Independent Director, (‘SID’), led a review
of the Chair’s performance. A meeting
was held with the other non-executive
directors, without the Chair being present.
The review focused on the relationship
between the Chair and the CEO, the overall
leadership of the Board, the governance
process, the conduct of Board meetings
and the quality of debate. In addition, the
Chair’s relationship with major shareholders
and his understanding of their priorities
were discussed.

A summary of the key findings was shared
at a subsequent meeting between the SID
and the Chair. It was also noted that the
Chair had no other significant external
commitments and was able to dedicate
sufficient time to the role.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Stakeholder engagement and Section 172(1) statement
Our approach
The Board is responsible for leading shareholder engagement. Like many major UK businesses, the Group operates in a complex and
interconnected commercial and regulatory environment, which impacts and touches many different stakeholders. By understanding and
engaging with stakeholders, the Board can consider their interests and priorities when making key decisions.

This also aligns with our purpose of Enriching Life Through Food for our consumers, our planet and our colleagues, and ensures that
we work constructively with stakeholders to deliver value creation and promote the long-term sustainable success of the Group.

The table on pages 80 and 81 sets out our key stakeholders and our engagement with them. Set out below are two case studies,
which illustrate where the Board has taken into consideration the interests of various stakeholder groups.

Knighton
factory

The site at Knighton has a complex ownership history and
the business has worked hard to explore multiple options
to improve its commercial viability since it regained full
management control in May 2016. This included progress
to reduce the cost base and increase efficiency. However,
despite these efforts, it remained reliant upon short-term
marginal contracts, which did not cover the overheads
associated with running the factory.

The site has aged infrastructure, which would be difficult
to improve significantly and bring in line with operational
and environmental standards fit for the future. Moving
production to other Premier Foods’ sites, will allow the
business to reduce its overall environmental impact.

Against this backdrop, it was proposed in January 2023 to
enter a consultation process with colleagues regarding the
future of the site and, following this consultation, a decision
was made to close it.

Capital
allocation

As part of its review of the Group’s strategic plan and
budget, the Board has considered capital allocation
over the short to medium term and the importance of
balancing investment choices and the needs of different
stakeholder groups. This included choices for investment
in the business to launch NPD, improve efficiency, enhance
environmental performance, and support colleague talent
and development, in order to drive the Group’s growth
strategy, the potential for further targeted acquisitions,
debt servicing and financing, and the requirements of
shareholders and pension schemes.

The Board was concerned about colleagues affected by
the proposal and the subsequent impact on the local
supply chain and community. The Group fully supported
colleagues throughout the consultation process and sought
to mitigate the impact on affected colleagues, including
making colleagues aware of alternative roles at other sites,
offering a range of training programmes to enhance skills
and qualifications and working with other local employers to
share opportunities within their organisations. The business
also engaged with local residents during the consultation
period and continues to honour all obligations with regard to
services provided from the site.

The Board met on several occasions over the year to review
the proposals for the factory in detail and considered
alternative options for the site, including the potential to
sell the business as a going concern. The Board reviewed
the contingency planning and risk assessment to customers
and the ongoing supply of product to the Group’s other
sites. In addition, it reviewed the communications plan,
consultation process, financial impact and proposed
timetable, associated with a decision to close the site.
As part of this review, the Board has considered a wide
range of stakeholders, including site colleagues, the
local community, customers, environmental matters and
alignment with the Group’s long-term growth strategy.

The Board is conscious of the importance of dividend
payments for shareholders and, over the last few years, the
Company has made significant progress in deleveraging the
business and reducing Net debt to a level that enabled the
reintroduction of dividend payments in 2021 (see our KPIs
on pages 56 to 59. As part of its progressive dividend policy,
the Company has proposed a final dividend for FY22/23 of
1.44p per share to shareholders, representing a 20% increase
on the prior year.

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWGovernance overview

CONTINUED

Customers and consumers

Colleagues

Suppliers

Why these stakeholders are important to our business

Customers and consumers buy and eat
our products – they are at the heart of the
Group’s business model.

We have an experienced and dedicated workforce
of over 4,000 colleagues at 15 sites across the UK.
We have a responsibility to ensure all colleagues
work in a safe environment and have opportunities
to learn and develop in their careers.

We are one of the UK’s largest food producers
and we are proud to work with many British
suppliers. Over the year, 84% of our total third-
party spend was with UK-based suppliers.

Issues and factors that are most important to these stakeholders

• Category leadership

• Understanding our purpose, strategy and

• Understanding the Group’s strategy

• How our factories impact on local

• Food safety

• Regular communications with

• Shareholder return over the

• Excellent customer service levels

• Innovative, relevant products that meet

consumers’ needs

• Great-tasting products

values

and growth plans

• Reward and recognition

• Forming long-term collaborative partnerships

• Volunteering and supporting

• Safe and pleasant working conditions

• Transparent terms of business

• Learning and development opportunities

• Fair payment terms

• Convenient and responsible packaging formats

• Health and well-being

• Environmental, nutritional and

• Inclusion and Diversity

sustainability issues

Engagement and outcomes

We seek to develop sustainable partnerships
with our customers focused on driving mutual
category growth. Regular meetings take place
at many levels, through the sales team, senior
management and CEO. These cover range
reviews, new products, promotions, displays and
service levels. Feedback from customers is also
provided via an annual customer survey.

Customer insights, from various channels,
are shared and discussed at Board meetings,
including details on consumer behaviours, market
trends and competitor activities. Product tastings
and NPD are showcased at Board meetings.
Customer and consumer feedback is reported to
the Board via KPIs.

It is essential that we engage with our consumers
so that we can understand consumption and
lifestyle trends in order to help us to create
products that meet their needs.

We have a dedicated Consumer Careline,
through which we monitor and deal with
issues our consumers raise.

We also regularly benchmark our products
with consumers in blind panel tests.

Further information

→ Read more on Making nutritious and
sustainable food on pages 30 and 31.

We communicate and engage with colleagues
in many ways throughout the year, to ensure
they understand our business priorities and
performance. This ensures that, in turn, we can
listen to their issues and concerns.

We have regular Company briefings led by the
CEO and shared by video feed to all sites across
the Group. There are regular site briefings from
management to give presentations and listen to
feedback, supplemented by ELT and Board visits.

Feedback is received via Group employee
surveys, line management and HR teams,
resulting in targeted action plans to address
key areas for improvement. The Board receives
regular updates on key employee issues and
internal communications.

To increase the focus on two-way communication,
the Workforce Engagement NED regularly attends
employee forums to discuss key issues directly
with colleagues.

A formal whistleblowing procedure is in place to
allow employees to raise any concerns or issues
they have confidentially, and details of all cases
raised are fed back to the Board via the Audit
Committee.

→ Read more on Nourishing the lives of our
colleagues and communities on pages 34
and 35.

→ Read more on Contributing to a healthier

planet on pages 32 and 33.

It is crucial that we develop strong relationships
with our suppliers, based upon mutual trust and
respect, to ensure that we can source high-quality
ingredients at the right price.

We have open, constructive and effective
relationships with suppliers through regular
meetings, which provide both parties the ability
to feed back on successes, challenges and our
ongoing strategy.

Regular audits of suppliers are undertaken
to ensure compliance with ethical sourcing
standards. Feedback from suppliers is also
provided via feedback surveys. The Company’s
whistleblowing hotline has been extended to
include suppliers to allow them to raise any
concerns anonymously.

Key supplier contracts are discussed by the Board
as appropriate.

Payment policies, practice and performance are
reported through the Government’s Payment
Practices Reporting portal.

→ Read more on Baked-in behaviours on pages

→ Read more on Nourishing the lives

→ Read more on Baked-in

→ Read more on Net debt and free

→ Read more on Engagement with

36 and 37.

of our colleagues and communities

behaviours on pages 36 and 37.

cash flow KPIs on page 57

shareholders on page 91

on pages 34 and 35.

→ Read more on Contributing to a

healthier planet on pages 32 and 33.

As a responsible food manufacturer,

The Board believes in the

The Group’s banks, bond holders

An important role of the Board

we consider the impact we have in

importance of acting responsibly

and lending group provide essential

is to represent and promote the

the areas we operate, including local

and operating with high standards

financing that supports the long-term

interests of its shareholders, as well

businesses, residents and charities.

of business conduct. The Group

viability of the Group. The Group also

as being accountable to them for

We also have an important role to

also takes an active role in seeking

has a large defined benefit pension

the performance and activities of

play in ensuring we reduce our impact

to shape and influence debates

scheme, with approximately 42,000

the Group.

on the environment.

around key issues in society

pensioners and deferred pensioners,

relating to food safety, nutrition

who depend on the Group’s long-

and health and well-being issues.

term ability to fund the schemes.

communities

charities

• Reducing carbon emissions

• Environmental commitments

• Reducing plastic packaging and

improving recyclability

• Nutrition

• Tax

• Conducting business

in a fair way

regards to the Group’s strategy

medium-term

and trading performance

• Good governance and

• Cash flow and Net debt levels

stewardship of the Group and

• The strength of our employer

its brands

covenant

• Delivery of financial performance

• Ongoing schedule of contributions

• Maintaining the appropriate

level of leverage

• Dividends

Updates are provided to the Board

The Board receives regular

Management engages regularly with

The Board believes it is very

on ESG (Environmental Social and

updates from the Corporate Affairs

the Group’s lenders, bond holders and

important to engage with its

Governance) matters affecting the

& ESG Director on key regulatory

banking group via conference calls,

shareholders and does this in a

business, so that the long-term

issues affecting the Group and the

conferences and face-to-face meetings.

number of ways.

sustainability of the Group can be

food industry, such as nutritional

considered in its decision making.

guidelines, advertising and

The Board receives updates on KPIs

promotions.

During the first half of the year, the

This includes the financial results

Group completed the first extension

presentations and conference calls

of its new Revolving Credit Facility

for shareholders and analysts, face-

relating to our economic contribution

The General Counsel & Company

to 2025.

and environmental impact, as well as

Secretary provides updates on

our contributions to the community,

governance, legal, regulatory and

both at a local site level and via

compliance matters.

The CFO maintains a regular dialogue

via attendance at Trustee and

Investment Committee meetings

the work we do with our corporate

charity partners.

We seek to take an active role

and regularly reports on the Group’s

in responding to the key issues

trading performance. Periodic updates

In 2021, the Board reviewed and

affecting our industry, through

are provided to the Board on funding

approved a new ESG strategy, the

membership of organisations

levels and investment strategy.

Enriching Live Plan, based around three

such as the Institute for Grocery

pillars: Product, People and Planet.

Distribution and the Food and

Drink Federation.

to-face meetings, investor road

shows and anonymous shareholder

feedback via brokers. The Chair

and CEO meet regularly with

shareholders to discuss strategic

and governance matters. The SID

and committee Chairs also engage

with shareholders on specific

matters, when appropriate.

Board members also have

the opportunity to meet with

private shareholders at the

Company’s AGM.

The Group reinstated dividend

payments in 2021 and the Board

has recommended a final dividend

for FY22/23 of 1.44p, an increase of

20% from the prior year.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Communities and
environment

Government and
society

Bond holders, bank
and pension schemes

Shareholders, investors
and analysts

As a responsible food manufacturer,
we consider the impact we have in
the areas we operate, including local
businesses, residents and charities.
We also have an important role to
play in ensuring we reduce our impact
on the environment.

The Board believes in the
importance of acting responsibly
and operating with high standards
of business conduct. The Group
also takes an active role in seeking
to shape and influence debates
around key issues in society
relating to food safety, nutrition
and health and well-being issues.

The Group’s banks, bond holders
and lending group provide essential
financing that supports the long-term
viability of the Group. The Group also
has a large defined benefit pension
scheme, with approximately 42,000
pensioners and deferred pensioners,
who depend on the Group’s long-
term ability to fund the schemes.

An important role of the Board
is to represent and promote the
interests of its shareholders, as well
as being accountable to them for
the performance and activities of
the Group.

• Category leadership

• Understanding our purpose, strategy and

• Understanding the Group’s strategy

• How our factories impact on local

• Food safety

• Regular communications with

• Shareholder return over the

values

and growth plans

communities

• Reward and recognition

• Forming long-term collaborative partnerships

• Volunteering and supporting

charities

• Reducing carbon emissions

• Environmental commitments

• Reducing plastic packaging and

improving recyclability

• Nutrition

• Tax

• Conducting business

in a fair way

regards to the Group’s strategy
and trading performance

• Cash flow and Net debt levels

• The strength of our employer

medium-term

• Good governance and

stewardship of the Group and
its brands

covenant

• Delivery of financial performance

• Ongoing schedule of contributions

• Maintaining the appropriate

level of leverage

• Dividends

Updates are provided to the Board
on ESG (Environmental Social and
Governance) matters affecting the
business, so that the long-term
sustainability of the Group can be
considered in its decision making.

The Board receives updates on KPIs
relating to our economic contribution
and environmental impact, as well as
our contributions to the community,
both at a local site level and via
the work we do with our corporate
charity partners.

In 2021, the Board reviewed and
approved a new ESG strategy, the
Enriching Live Plan, based around three
pillars: Product, People and Planet.

The Board receives regular
updates from the Corporate Affairs
& ESG Director on key regulatory
issues affecting the Group and the
food industry, such as nutritional
guidelines, advertising and
promotions.

The General Counsel & Company
Secretary provides updates on
governance, legal, regulatory and
compliance matters.

We seek to take an active role
in responding to the key issues
affecting our industry, through
membership of organisations
such as the Institute for Grocery
Distribution and the Food and
Drink Federation.

Management engages regularly with
the Group’s lenders, bond holders and
banking group via conference calls,
conferences and face-to-face meetings.

The Board believes it is very
important to engage with its
shareholders and does this in a
number of ways.

During the first half of the year, the
Group completed the first extension
of its new Revolving Credit Facility
to 2025.

The CFO maintains a regular dialogue
via attendance at Trustee and
Investment Committee meetings
and regularly reports on the Group’s
trading performance. Periodic updates
are provided to the Board on funding
levels and investment strategy.

This includes the financial results
presentations and conference calls
for shareholders and analysts, face-
to-face meetings, investor road
shows and anonymous shareholder
feedback via brokers. The Chair
and CEO meet regularly with
shareholders to discuss strategic
and governance matters. The SID
and committee Chairs also engage
with shareholders on specific
matters, when appropriate.

Board members also have
the opportunity to meet with
private shareholders at the
Company’s AGM.

The Group reinstated dividend
payments in 2021 and the Board
has recommended a final dividend
for FY22/23 of 1.44p, an increase of
20% from the prior year.

→ Read more on Nourishing the lives
of our colleagues and communities
on pages 34 and 35.

→ Read more on Contributing to a

healthier planet on pages 32 and 33.

→ Read more on Baked-in

→ Read more on Net debt and free

→ Read more on Engagement with

behaviours on pages 36 and 37.

cash flow KPIs on page 57

shareholders on page 91

Why these stakeholders are important to our business

Customers and consumers buy and eat

We have an experienced and dedicated workforce

We are one of the UK’s largest food producers

our products – they are at the heart of the

of over 4,000 colleagues at 15 sites across the UK.

and we are proud to work with many British

Group’s business model.

We have a responsibility to ensure all colleagues

suppliers. Over the year, 84% of our total third-

work in a safe environment and have opportunities

party spend was with UK-based suppliers.

to learn and develop in their careers.

Issues and factors that are most important to these stakeholders

• Excellent customer service levels

• Innovative, relevant products that meet

consumers’ needs

• Great-tasting products

• Convenient and responsible packaging formats

• Health and well-being

• Environmental, nutritional and

• Inclusion and Diversity

sustainability issues

Engagement and outcomes

• Safe and pleasant working conditions

• Transparent terms of business

• Learning and development opportunities

• Fair payment terms

We seek to develop sustainable partnerships

We communicate and engage with colleagues

It is crucial that we develop strong relationships

with our customers focused on driving mutual

in many ways throughout the year, to ensure

with our suppliers, based upon mutual trust and

category growth. Regular meetings take place

they understand our business priorities and

respect, to ensure that we can source high-quality

at many levels, through the sales team, senior

performance. This ensures that, in turn, we can

ingredients at the right price.

management and CEO. These cover range

listen to their issues and concerns.

reviews, new products, promotions, displays and

service levels. Feedback from customers is also

provided via an annual customer survey.

We have regular Company briefings led by the

relationships with suppliers through regular

CEO and shared by video feed to all sites across

meetings, which provide both parties the ability

the Group. There are regular site briefings from

to feed back on successes, challenges and our

We have open, constructive and effective

Customer insights, from various channels,

management to give presentations and listen to

ongoing strategy.

are shared and discussed at Board meetings,

feedback, supplemented by ELT and Board visits.

including details on consumer behaviours, market

trends and competitor activities. Product tastings

and NPD are showcased at Board meetings.

Customer and consumer feedback is reported to

the Board via KPIs.

Feedback is received via Group employee

surveys, line management and HR teams,

Regular audits of suppliers are undertaken

to ensure compliance with ethical sourcing

standards. Feedback from suppliers is also

resulting in targeted action plans to address

provided via feedback surveys. The Company’s

key areas for improvement. The Board receives

whistleblowing hotline has been extended to

regular updates on key employee issues and

include suppliers to allow them to raise any

It is essential that we engage with our consumers

internal communications.

concerns anonymously.

so that we can understand consumption and

lifestyle trends in order to help us to create

products that meet their needs.

We have a dedicated Consumer Careline,

through which we monitor and deal with

issues our consumers raise.

To increase the focus on two-way communication,

Key supplier contracts are discussed by the Board

the Workforce Engagement NED regularly attends

as appropriate.

employee forums to discuss key issues directly

with colleagues.

Payment policies, practice and performance are

reported through the Government’s Payment

A formal whistleblowing procedure is in place to

Practices Reporting portal.

allow employees to raise any concerns or issues

We also regularly benchmark our products

they have confidentially, and details of all cases

with consumers in blind panel tests.

raised are fed back to the Board via the Audit

Committee.

Further information

→ Read more on Making nutritious and

sustainable food on pages 30 and 31.

→ Read more on Nourishing the lives of our

→ Read more on Baked-in behaviours on pages

colleagues and communities on pages 34

36 and 37.

and 35.

→ Read more on Contributing to a healthier

planet on pages 32 and 33.

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWNomination Committee report

Dear shareholder,
On behalf of your Board, I would like to
present the Nomination Committee report
for the period ended 1 April 2023.

The responsibilities of the Committee are
set out in its terms of reference (available
on the Group’s website), and include:

• Considering the size, structure and

composition of the Board;

• Leading the formal, rigorous and

transparent process for the appointment
of directors;

• Making appointment recommendations
so as to maintain an appropriate balance
of skills, knowledge, experience and
diversity on the Board;

• Ensuring a formal and rigorous Board and
Committee evaluation is undertaken on
an annual basis (an overview of which is
provided on page 78); and

• Overseeing the Company’s policy,

objectives and strategy on Inclusion and
Diversity.

The Committee also reviews the succession
requirements of the Board and senior
management and makes recommendations
to the Board as appropriate. With the
exception of myself, as Chair of the
Board, only independent non-executives
are members of the Committee. I was
appointed Chair of the Board in 2019
and was considered fully independent on
appointment. Details of the Committee’s
membership and meeting attendance are
set out on page 75.

Board membership and recruitment
The procedures for appointing new directors
are also set out in the Committee’s terms
of reference. The process of appointment is
led by the Chair of the Board, except where
the appointment is for their successor, when
it is led by the Senior Independent Director
(‘SID’). The process includes an assessment
of the time commitment expected for the
role, other significant business commitments
and any potential conflicts of interest.

Before an appointment is made, the
Nomination Committee evaluates the
balance of skills, knowledge, experience
and diversity on the Board, as well as the
skills required to help deliver the Group’s
strategy and meet the future challenges of
the business.

The Committee prepares a candidate
specification setting out the role and
capabilities required. Non-executive
directors and the Chair of the Board are
generally appointed for an initial period of
three years, which may be renewed for a
further two terms. Reappointment is not
automatic at the end of each three-year
term. As noted in last year’s Nomination
Committee report, Roisin Donnelly was
appointed as a non-executive director on
1 May 2022, following a rigorous external
search process.

During the financial year, a review of
Committee membership was undertaken
and, following a recommendation to the
Board, this came into effect following
the close of the AGM in 2022 (see page
75 for details of the new committee
memberships). The Committee also
considered the composition, balance and
diversity of the Board, reviewed succession
plans for executive directors and, as part
of the external Board evaluation exercise
undertaken in the year (see page 78), a
review of the Committee’s effectiveness was
undertaken.

Board tenure
The average length of appointment of
our NEDs was three years, as at year end.
The breakdown for the full Board can be
seen in the following chart.

0–1 years
1–3 years
3–6 years

6–9 years
9+ years

(As at 1 April 2023)

Board independence
The Governance Code recommends that
at least half the Board, excluding the
Chair, should comprise non-executive
directors determined by the Board to be
independent.

Chair
Independent
directors

Non-independent
directors

(As at 1 April 2023)

Only independent NEDs are members of
the Board’s committees, with the exception
of the Chair of the Nomination Committee.
The Chair of the Board, who was considered
independent on appointment, chairs
the Nomination Committee, but is not a
member of the Audit or Remuneration
Committees. Yuichiro Kogo, who represents
our largest shareholder, is fully independent
of management, but is not considered
independent.

36%
33%

11%
11%

40%
37%

37%
37%

Gender diversity
FY22/23
FY21/22

FY22/23
FY21/22

FY22/23

Board – (4 of 11)

ELT – (1 of 9)

ELT and direct reports (23 of 57)

All colleagues (1,505 of 4,098)

FY21/22

Board – (4 of 12)

ELT – (1 of 9)

ELT and direct reports (20 of 54)

All colleagues (1,604 of 4,332)

(Female: total, as at 1 April 2023)

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Talent and Succession management
The Board reviews the Group’s Talent and
Succession process on an annual basis.
This covers all management colleagues
to identify, monitor and develop talent
within the Group. Senior Leadership was
reviewed in detail, including all members
of the ELT and their direct reports. It was
noted that there is a strong culture of
succession planning and talent management
within the organisation. This has resulted
in a significant proportion of senior roles
being filled internally, including the current
CEO and CFO, and the majority of ELT
and Factory General Manager positions.
Colleagues see this as positive, helping not
only in attracting talent externally, but also
with internal retention. The Board assessed
the strength of the talent pipeline, and
where there were potential risks, the plans
to address these.

The Committee met separately during the
year to review succession plans for the
executive directors.

During the year the Group adopted a new
talent process, introduced a more robust
approach to assessing the risk of key
individuals leaving the business and the
likely impact, developing plans to mitigate
identified risks. The review also highlighted
the key talent and development plans
specifically focused on strengthening gender
and ethnic diversity within management.

Review of non-executive
director performance
Over the course of the year, a review of
the contribution and performance of the
independent non-executive directors
was undertaken. This included a review
of the contribution of each NED, their
other appointments and whether these
impacted on their availability to commit
appropriate time to their roles, their
continuing independence, and training and
development needs. This was considered
by the Nomination Committee as part of
its assessment of the current composition
of the Board and the need for any future
appointments, as part of the succession
planning process. Following this review,
it was agreed that the Board had an
appropriate balance of skills, experience
and knowledge of the Group to enable it
to discharge its duties and responsibilities
effectively. In addition, the current Board
was felt to have a broad range of retail,
marketing, commercial and financial
experience, which is appropriate for the size

and complexity of the Group. Consequently,
the Nomination Committee recommended
the re-election (or election) of all directors
at the 2023 AGM.

Richard Hodgson’s third term of
appointment will end at the AGM in July
2023, following which he will have served
as a NED for 8.5 years. The Committee
considers his significant customer
experience to be of value to the Board and,
therefore, recommend he be appointed for
a further year, until the AGM in July 2024.
The Committee considers him to remain
independent of management, noting that
the current CEO and CFO have been in place
for less than four years.

Inclusion and diversity
The Board adopted a Diversity Policy in
2022, which is available on the Group’s
website. The purpose of the policy is to
ensure an inclusive and diverse membership
of the Board and its committees, to
enhance decision making and assist in the
development and delivery of the Group’s
strategy. The Board believes it is important
that its membership includes a broad
mix of skills, professional and industry
backgrounds, geographical experience and
expertise, gender, tenure, ethnicity and
diversity of thought.

A culture of inclusion and diversity is
promoted through a clear tone from the
top, with the Board and ELT championing
inclusion and diversity in support of the
Group’s values.

The Board, or where appropriate the
Nomination Committee, will:

• Consider all aspects of diversity when

reviewing the composition of the Board
and its committees, and when reviewing
the Board’s effectiveness;

• Only engage executive search firms who
have signed up to the voluntary Code of
Conduct on gender diversity and best
practice and request them to identify
suitable candidates for appointment to
the Board on merit against objective
criteria, having regard to the benefits
of diversity in promoting the success of
the Group;

• Encourage the development of a diverse
internal talent pipeline to meet future
succession planning needs of the Group,
by supporting and monitoring the Group’s
actions to increase the proportion of
senior leadership roles held by women,
people from ethnic minority backgrounds

and other under-represented groups
across the business; and

• Assist the development of a diverse

pipeline of high-calibre candidates by
encouraging senior individuals within the
business to take on additional roles to
gain valuable board experience.

Developments over the year
The Board and Nomination Committee
regularly review the Group’s approach
to diversity (including both gender and
ethnicity), within senior management and
across the whole business and this remains
an area of significant focus.

The Board supports the recommendations
set out in the FTSE Women Leaders Review
and the Parker Review. The Nomination
Committee has reviewed the requirements
of, and compliance with, LR 9.8.6(9) and
notes that the Company is compliant
with the recommendations of the Parker
Review, but not yet in compliance with
the requirements of FTSE Women Leaders
Review, but has established a road map
with the aim of achieving full compliance, as
required, by the end of 2025.

At least 40% of Board directors to be women
As at 1 April 2023, 36% of Board directors
were women. In May 2022, Roisin Donnelly
joined the Board and, in July 2022, Pam
Powell and Daniel Wosner, retired as
directors. This resulted in overall female
representation reducing from 39% to 36%.
The Committee will continue to monitor the
skills and experience required by the Board,
and the need to replace departing Board
members, and currently anticipates female
representation to be at least 40% by the end
of 2025.

At least one of Chair, SID, CEO, CFO to be
a woman
As at 1 April 2023, none of the four senior
posts were held by a woman. Given that
all of the roles are currently occupied, the
Board aims to increase diversity within this
area, as soon as the opportunity arises,
taking all aspects of diversity into account.

At least one director is from a minority
ethnic background
As at 1 April 2023, the Board was compliant
with the recommendation.

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWNomination Committee report

CONTINUED

Inclusion and diversity is one of the core
principles of Premier Food’s People strategy,
which forms part of the Group’s Enriching
Life Plan. Premier Foods is committed to
creating an inclusive culture across its whole
organisation and aims to ensure all existing
and potential colleagues are provided with
equal opportunity and are respected, valued
and encouraged to bring their authentic
selves to work. The Group has adopted the
following diversity targets:

• Achieving gender balance for the senior
management population by 2030; and

• Ensuring diversity KPIs at our sites reflect

their regional demographic by 2030.

The Board and Committee recognise that
strong progress has been made across
a number of areas and that this has
strengthened the Company’s employer
brand. In 2021 the Group has developed
and launched a Reverse Mentoring
Programme, which is designed to help
address the gender imbalance within
senior roles across the business. The Group
has seen a strong improvement in female
representation within the Group of ELT
direct reports, increasing from 28% in
FY20/21 to 37% in FY21/22 and, as at year-

Gender identity or sex

end, it now stands at 40%. This compares to
37% female representation for all colleagues
within the business.

In addition, the HR team have reviewed
colleague recruitment across the business
to make sure the Group’s practices attract
as diverse a talent pool as possible. The
Group is a member of Stonewall, Trans in
the City and headline sponsors of Diversity
in Grocery. Further training was also
provided over the year, with the continued
implementation of a line manager ‘diversity
in recruitment’ training module.

During 2022, the Group introduced a
Sponsorship Programme for ethnically
diverse colleagues across the graded
management population with the assistance
of an external partner, which is designed to
enable diverse talent to develop and excel.
The Group continues to promote a range of
programmes to raise awareness of Inclusion
and Diversity throughout the business.

The Group has continued to make progress
over the year in recording colleague diversity
data. Colleagues are able to provide their
personal data by different methods, which
include the completion of a paper-based

application, via a tablet, by scanning a QR
code or a unique URL link for connected
users. The questions included in the
survey are based around nine protected
characteristics, which include gender
identification, ethnic background, sexual
orientation, age demographic and parental/
carer status. Colleagues are presented with
a pick list of answers and always offered a
‘prefer not to say’ option.

Further information on our approach to
Inclusion and Diversity across the business
is set out in the section on our values and
culture, on pages 14 and 15, and progress
against our KPIs is set out on pages 56 to 59.

Information/data on the diversity on the
Board and ELT, as required under Listing
Rule, LR 9.8.6(9), is presented in the tables
below. These set out the position as at the
year-end (1 April 2023), and no changes
have occurred up to 18 May 2023.

Number of board
members

Percentage of the
board

7
4
–

64%
36%
–

Number of board
members

Percentage of the
board

Number of senior
positions of the
board (CEO, CFO,
SID and Chair)

4
–
–

Number of senior
positions of the
board (CEO, CFO,
SID and Chair)

Number in
executive
management

Percentage
of executive
management

8
1
–

89%
11%
–

Number in
executive
management

Percentage
of executive
management

10
–
1
–
–

92%
–
8%
–
–

4
–
–
–
–

8
–
–
–
1

89%
–
–
–
11%

Men
Women
Not specified/prefer not to say

Ethnic background

White British or other White
(including minority-white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/ Black British
Other ethnic group, including Arab

Colin Day
Nomination Committee Chair

18 May 2023

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Audit Committee report

Dear shareholder,
On behalf of your Board, I am pleased to
present the Audit Committee report for the
period ended 1 April 2023. The Committee
has delegated responsibility for ensuring
the integrity of the Group’s Financial
Statements, reviewing the effectiveness of
the Group’s financial reporting systems and
the internal control policies and procedures
for the identification, assessment and
reporting of risk.

The Committee also keeps under review
the relationship with the external auditors,
including the terms of their engagement
and fees, their independence and expertise,
resources and qualification, and the
effectiveness of the audit process.

All members of the Committee are
independent non-executives, with a broad
range of FMCG, commercial, operational, IT,
financial and marketing experience relevant
to the Group’s business. Both myself and Tim
Elliott are considered by the Board to have
recent and relevant financial experience.
Details of Committee membership, their
qualifications and meeting attendance are
set out on pages 72 to 75. In addition to
the Committee members, the CEO, CFO,
Chair, Director of Financial Control, Director
of Internal Audit & Risk and external audit
partner are regularly invited to attend and
present at the Committee’s meetings.

Areas of review
During the financial period, the Committee
held four scheduled meetings and a further
four additional meetings in connection with
the external audit tender exercise. Key areas
of review were as follows:

• Monitored the integrity of financial

reporting, including the annual report
and the full-year, half-year and quarterly
results announcements;

• Ensured the Annual Report and Accounts
are fair, balanced and understandable,
and in compliance with relevant
regulations;

• Considered the going concern and
viability statements for the Group;

• Undertook a competitive external audit
tender exercise and recommended the
appointment of a new firm of auditors;

• Reviewed the statutory audit plan with
the lead audit partner to assess the
scope, methodology and areas of key risk
and materiality;

• Reviewed the ongoing impact of macro-
economic developments on the Group’s
performance and viability, including the
cost of living crisis and the inflationary
pressures on input costs;

• Monitored preparation for the new BEIS

framework for internal controls;

• Received regular reports from the internal
audit function, ensured it was adequately
resourced, monitored its activities and
effectiveness, and approved both the
annual internal audit plan and internal
audit charter;

• Reviewed the appropriateness of the

Alternative Performance Measures used
by the business;

• Received updates on changes to

governance and financial reporting,
including TCFD;

• Reviewed the adequacy and effectiveness
of the Group’s risk management systems
and mitigation programmes;

• Reviewed the Group’s policy on

Auditor Independence and Non-Audit
Services; and

• Reviewed the adequacy of the Group’s
whistleblowing helpline, and the calls
received through the service and
management’s response to them.

External auditors tender
and appointment
The Committee confirms that it has
complied with the requirements of the
Competition & Markets Authority’s
Statutory Audit Services Order 2014
during the financial year. As highlighted
in last year’s annual report, the
Company undertook a formal audit
tender exercise in 2022, following which
PricewaterhouseCoopers LLP (PwC) was
appointed by the Board in August 2022
to act as its independent auditors for the
financial year ended 1 April 2023. The
current Group audit partner is Richard
Porter. Accordingly, KPMG LLP, who had
been the Group’s independent auditors
since September 2015, resigned from its
role as auditor with effect from
23 August 2022. The Board will propose
a resolution for shareholders to approve
the reappointment of PwC as independent
auditors for the financial year ending
30 March 2024 and for the Audit Committee
to be authorised to set the auditors’
remuneration.

The Committee undertook a comprehensive
and competitive tender process,
which included several meetings with
management, the Committee members
and Chair, the Chair of the Board, CEO
and CFO, and a visit to the Group’s Shared
Services Centre in Manchester. The
tender process was designed following
FRC guidance on best practice for audit
tenders. The selected tender candidates
submitted written proposal documents
and formal presentations were made to
the Tender panel, which comprised the
Audit Committee Chair, CFO, Director of
Financial Control and Head of Procurement,
Corporate Services, with the Tender panel
making a recommendation of two possible
audit firm options to the Committee for
consideration.

Committee members undertook a formal
assessment of each firm’s credentials and
experience, which focused on areas such as
the firm’s:

• Approach to ensuring overall audit

quality, independence, and objectivity;

• Capabilities to undertake the audit

including resourcing;

• Culture and how well it would fit with

Premier Foods;

• Alignment and ambition of the firm’s

Environmental, Social and Governance
strategy with the Group’s;

• Experience of the business, food industry
and other similar-sized UK-focused FMCG
businesses; and

• Experience of the Group’s key audit matters.

It was noted that the standard of
submission had been high and, after careful
evaluation, the Committee submitted to
the board two possible audit firm options
with a justified preference for PwC. In
making its recommendation of firms, the
Committee considered the findings and
conclusions of the public reports on the UK
audit firms published by the FRC. Having
conducted a tender and appointed a new
external auditor in August 2022, the latest
point to undertake the next tender will
be after the FY31/32 year end, at which
point the current external auditor could
be reappointed for a further 10-year term,
following a competitive tender.

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWAudit Committee report

CONTINUED

External auditors independence,
effectiveness and non-audit services
The effectiveness of the external
auditors is monitored by the Committee
through regular engagement with senior
management and private meetings
held with the external auditor without
the presence of management. Their
effectiveness is also considered as part
of the Committee’s annual evaluation
process. While PwC were only appointed
in August 2022, over the course of this
initial term of appointment, the Committee
has reviewed the auditors’ independence
and assessed the effectiveness of the
external audit process by reference to:
the scope of the audit work undertaken;
presentations to the Committee; feedback
from management involved in the audit
process; the separate review meetings held
without management present; relevant UK
professional, regulatory requirements; the
Company’s Auditor Independence and Non-
Audit Services policy; and the relationship
with the auditors as a whole, including the
provision of any non-audit services.

In accordance with our policy, the Committee
has continued to review the level of non-
audit fees with management during the year.
The Committee also received an update from
PwC’s lead partner on the internal controls,
which they employ to safeguard their
independence, integrity and objectivity. The
Group’s policy on Auditor Independence and
Non-Audit Services, which is aligned with
the FRC Revised Ethical Standard 2019, is
available on the Group’s website.

Non-audit fees for the period amounted
to £219,000 (FY21/22: PwC £Nil, KPMG
£199,500) representing 18% of the audit
fee. As part of the Company’s ongoing ESG
strategy, PwC was engaged to perform
independent limited assurance procedures
on selected 2022/23 ESG performance
measures. In addition, as with previous
years, the external auditor was engaged
to provide royalty statements, which
are required under the Group’s Cadbury
licence with Mondelez International. The
Committee remains mindful of guidelines
in respect of non-audit services and the
potential threat to auditor independence, as
set out in the FRC’s Revised Ethical Standard
2019. The Committee assessed that, in each
case, the nature of the work would be best
performed by PwC due to their size and
knowledge of the business, the timescale
required for completing the assignments,

and the overall cost in undertaking the
work. In addition, PwC consulted their own
internal Audit Quality and Risk Management
team prior to agreeing the engagements.
PwC’s procedures for ensuring compliance
with quality control standards, maintaining
independence, integrity and objectivity
were also reviewed and no matters were
identified that might impair the auditors’
independence and objectivity.

Following these reviews, the Committee
is satisfied that PwC is independent and
effective, and has recommended to the
Board that PwC be reappointed as external
auditors at the AGM in 2023.

Alternative Performance Measures
(‘APMs’)
The Group’s performance measures
continue to include a number of measures
that are not defined or specified under
IFRS. The Audit Committee has considered
presentation of these additional measures
in the context of the guidance issued by the
European Securities and Markets Authority
(‘ESMA’) and the FRC in relation to the
use of APMs, challenge from the external
auditor, and the requirement that such
measures provide meaningful insight for
shareholders into the results and financial
position of the Group. The Committee
reviewed the APMs used within the Group’s
financial statements, how the APMs were
defined and the rationale for their use; this
included a review of the new definition of
Trading profit from FY22/23.

APMs are defined relative to the equivalent
IFRS measures on page 55.

Committee evaluation
As part of the external Board evaluation
exercise conducted during the year (see
page 78 for more information), a review
of the Committee’s effectiveness was
also undertaken. The review included the
management of meetings, quality of papers
and presentations, and the Committee’s
effectiveness in assessing the work of the
internal and external auditors, the financial
statements, risk management and internal
controls. Following the review, it was
confirmed that the Committee remained
effective. An action plan for the coming year
was agreed, which included the need to
embed the new Director of Internal Audit
& Risk into the business and to continue to
develop constructive relationships with the
new external audit team.

The Committee met with the internal
and external auditors on four occasions
in the year without the presence of
management. This provides an opportunity
for the Committee to discuss matters
independently of management, assess the
relationship between management and
both the internal and external auditors, and
to discuss any potential areas of concern.
In addition, the Committee Chair also met
independently with the CFO, lead audit
partner and Director of Internal Audit &
Risk, on several occasions, to discuss key
audit matters.

Task Force on Climate-related
Financial Disclosures (‘TCFD’)
The Committee provides oversight
of the Group’s compliance with the
recommendations of TCFD. A TCFD steering
group was established last year to develop
the Group’s approach to TCFD, raise
awareness of climate-related risks around
the business and to report on progress to
the Committee. The TCFD steering group
also co-ordinates the adoption of TCFD
best practices into the Group’s Enterprise
Risk Management processes and ensures
visibility and oversight of the programme
by the ESG Governance Committee.
Over the year, the Committee reviewed
progress against the various work streams,
the Group’s TCFD roadmap and the four
disclosure pillars (Governance, Strategy,
Risk Management, and Metrics and Targets).
The Group’s TCFD disclosure is set out on
pages 38 to 48.

Risk management
The Group has an established risk
management framework to identify,
evaluate, mitigate and monitor the risks
the business faces. The risk management
framework incorporates both a top-down
and a bottom-up approach to ensure all the
Group’s risks are identified. The principles of
risk management have also been embedded
into the day-to-day operations of the
business units and corporate functions.

The Committee carried out an assessment
of the principal risks facing the business,
including climate-related risk, on two
occasions over the year. The reviews include
an assessment of new and emerging risks,
the movement in the risks, the strength
of the controls relied on and the status of
mitigating actions. The output from these
assessments have, subsequently, been

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023presented to and reviewed by the Board,
who retain ultimate accountability for risk
management for the Group, for further
review and discussion.

Details of our risk management process are
set out in the Risk management section, on
pages 60 to 66.

Internal controls
The Committee maintains responsibility
for reviewing the process for identifying
and managing risk and for reviewing
internal controls. It receives reports from
management, the Director of Internal Audit
and Risk, and the statutory auditors, in
addition to the results of any investigations
performed as a result of employee whistle-
blower calls, or otherwise. The Committee
considers the implications of findings from
the risk management process and from both
the internal and external auditors to the
Group’s controls framework. Any issues are
reported and discussed, and management
are challenged as to what actions they are
taking to improve the control framework and
minimise the likelihood of their reoccurrence.

The Board has delegated authority to the
Committee to monitor internal controls
and conduct the annual review. This
review covers all material controls, such as
financial, operational and compliance, the
preparation of the Group’s consolidated
financial statements, and also the
overall risk management system in place
throughout the year under review, up to the
date of this annual report. The Committee
reports the results of this review to the
Board for discussion and, when necessary,
agreement on the actions required to
address any material control weaknesses.
The Committee confirms that it has not
been advised of any failures of material
controls or material control weaknesses
during the year and the Committee
concluded that the Group’s internal controls
framework remains effective.

During the year, the Committee received
updates related to the anticipated
requirements of the UK Government’s
corporate reform proposals (‘Restoring
Trust in Audit and Corporate Governance’)
and on the Group’s preparations to ensure
that it meets its responsibilities under these
proposed reforms. A Steering Committee,
chaired by the CFO, oversees a Project

Execution Team who during FY23 performed
a programme of risk workshops and, where
required, control enhancements to ensure
evidence of the Group’s control framework.
The Committee will continue to monitor
the progress of the Group’s controls
enhancement programme against further
guidance issued by the UK Government’s
Department for Business and Trade.

Internal audit
The internal audit function carried out a
range of reviews across the Group providing
independent assurance to the Committee
on the design and operating effectiveness
of internal controls to mitigate financial,
operational and compliance risks. The
purpose, authority and responsibilities of
Internal Audit are embodied in the Internal
Audit Charter, which the Committee reviews
and approves on an annual basis. During
the year, a new Director of Internal Audit,
who has dual reporting lines to the Audit
Committee Chair and the Group CFO, was
appointed to further evolve the function.

The Committee discussed and approved the
FY22/23 audit plan to be executed by the
internal audit team at the start of the year,
ensuring its alignment with the Group’s
strategic priorities, risk management
outputs, and routine compliance control and
monitoring requirements. Under supervision
of the Director of Internal Audit and Risk, a
Co-Source Assurance Partner was utilised
to ensure complex or bespoke areas of risk
are adequately appraised. During FY23, this
included reviews of IT access controls, and a
review of import/export controls in a post-
Brexit environment.

The Committee reviewed the results
of the internal audit reports during
each meeting, looking in detail at any
reports where processes and controls
require improvement. The Committee
is also provided with updates on the
implementation of agreed management
actions and overall control environment
improvement at each meeting. For any
management action requirement not met
to its agreed timetable, the responsible
management are required to provide a
full explanation to the Committee as to
the reasons for the delay before a new
deadline is agreed.

The internal audit resource is monitored
such that, if internal or external
circumstances should give rise to an
increased level of risk, the audit plan can
be supplemented accordingly during the
year. The audit plan remains flexible and
any changes to the agreed audit plan are
presented to, and agreed by, the Committee.
The effectiveness of the internal audit
function is reviewed on an annual basis and
the Committee concluded that the internal
audit function has remained effective.

Risk management and internal
control over financial reporting
The directors have key procedures
established to confirm that they have
reviewed the effectiveness of the system of
risk management and internal control of the
Group during the year, the key features of
which are as follows:

• an annual budgeting process with regular
re-forecast of outturn, identifying key
risks and opportunities.

• regular reporting of financial information

and performance to the Board,
management monitors the results
throughout each financial year.

• an Internal Audit and Risk function which

reviews key business processes and
business controls, reporting to the Audit
Committee.

• third party reviews commissioned

periodically by the Group of areas where
significant inherent risks have been
identified, such as health and safety, ESG,
and cyber security.

• an organisational structure with clearly
defined limits of responsibility and
authority to promote effective and
efficient operations.

• a performance management appraisal

system, which covers the Group’s senior
management based on agreed financial
and other performance objectives.

• significant emphasis on cash flow
management. Bank balances and
available liquidity are reviewed on
a regular basis and cash flows are
compared to forecast.

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEW

Audit Committee report

CONTINUED

• reporting to the Board and/or its

committees on specific matters including
updated key risks, taxation, pensions,
insurance, treasury management, interest
and commodity exposures. The Audit
committee approving treasury policies.

• defined capital expenditure and other

investment approval procedures,
including due diligence requirements
where businesses are being acquired or
divested, or there is a material change in
operational or corporate structure.

• policy suite that covers anti-bribery and
corruption, cyber security, health and
safety and hazard awareness, Corporate
Criminal Offence, with training and
compliance monitoring.

Any control weaknesses that these
procedures identify are monitored and
addressed in the normal course of business.
No control failings or weaknesses that are
material to the Group as a whole have been
identified in the year to 1 April 2023.

Process for preparing consolidated
financial statements
The Group has established internal control
and risk management systems in relation
to the process for preparing consolidated
financial statements. The key features of
these internal control and risk management
systems are:

• The Internal Audit and Risk function and
management conduct various checks on
internal financial controls periodically.

• Management regularly monitors and

considers developments in accounting
regulations and best practice in financial
reporting, and where appropriate,
reflects developments in the consolidated
financial statements. Appropriate
briefings and/or training are provided
to key finance personnel on relevant
developments in accounting and financial
reporting. The Audit Committee is also
kept appraised of such developments.

• Any recommendations from the auditors,

the Financial Reporting Council, and
others in respect of financial reporting
are assessed with a view to continuous
improvement in the quality of the Group’s
financial statements.

• The monthly financial performance of the
Group is subject to review by both the ELT
and the Board.

• The Group’s financial results, which

consolidates the results of each operating
segment and makes appropriate
consolidation adjustments, is subject to
various levels of review by the Group
Finance function.

• The draft consolidated financial

statements are reviewed by an individual
independent from those individuals
who were responsible for preparing the
financial statements. The review includes
checking internal consistency, consistency
with other statements and arithmetical
accuracy.

• The Audit Committee and the Board

review the draft consolidated financial
statements. The Audit Committee
receives reports from management
and the external auditors on significant
judgements, changes in accounting
policies, changes in accounting estimates
and other pertinent matters relating to
the consolidated financial statements.

• The financial statements are subject to

external audit.

• The Group uses the same firm of auditors
to audit all material Group companies.

Fair, balanced and understandable
The Board requested that the Audit
Committee confirm whether the annual
report and accounts taken as a whole
were fair, balanced and understandable
and whether it provided the necessary
information for shareholders to assess the
Group’s position and performance, business
model and strategy. The Audit Committee
recommended that the Board make this
statement, which is set out on page 118.

In making this recommendation, the
Committee considered the process for
preparing the annual report, which included
regular cross functional reviews from
the teams responsible for preparing the
different sections of the report, senior
management review and verification of
the factual contents. It also considered the
balance and consistency of information,
the disclosure of risk, and the key messages
presented in the report.

Significant issues in relation
to the financial statements
The Committee considered the following
significant issues in relation to the financial
statements with management and the
internal and external auditors during
the year:

Commercial arrangements
Commercial payments to customers in the
form of rebates and discounts represent
significant balances in the income statement
and balance sheet. Calculations of these
balances require management assumptions
and estimates, including volumes sold
and the period of the arrangements. The
Committee reviewed the assumptions and
estimates and the level of accruals and
provisions in detail. Further information is
set out in note 3.3 on page 139.

Carrying value of goodwill and brands
Goodwill and brands represent a significant
item on the balance sheet and their
valuation is based on future business
plans whose outcome is uncertain. The
value of goodwill is reviewed annually
by management and the Committee and
brands are reviewed where there is an
indicator of impairment. The impairment
testing for goodwill and brands is based on
a number of key assumptions that rely on
management judgement.

For the purpose of goodwill, the Group
has four CGUs – Grocery, Sweet Treats,
International and Knighton. The Committee
reviewed the results of the goodwill
impairment testing of the CGUs and the
review of the carrying value of certain of
the Group’s brands. There is no goodwill
attributable to the Sweet Treats or
Knighton CGUs and the International CGU
has no goodwill or intangible assets. The
results of the impairment testing included
management’s assumptions in respect of cash
flows, long-term growth rates and discount
rates. The Committee also considered
sensitivities to changes in assumptions and
related disclosure, as required by IAS 36. This
year’s review concluded that no impairment
of Goodwill or brands was required. Further
information is set out in notes 12 and 13 on
pages 148 to 150.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Viability and going concern
The Audit Committee conducted detailed
reviews of the Group’s viability and going
concern, taking into account severe, but
plausible, business downsides, including
the potential impact of the current cost of
living crisis and continued global political
uncertainty driven by the conflict in Ukraine.
The Committee provided challenge to
management on the risks considered as
part of the assessment. Following the
review, the Committee concluded that it
was reasonable for the Board to expect that
the Group would have adequate resources
to operate for the foreseeable future and,
therefore, recommended that the viability
statement (set out on pages 67 and 68)
and the going concern statement (set out
in note 2.1 on pages 132 and 133) could be
supported.

Simon Bentley
Audit Committee Chair

18 May 2023

Acquisition accounting
Acquisition of The Spice Tailor was a
significant transaction for the Group during
the year and the Committee reviewed the
purchase price allocation and accounting
for the transaction. PwC challenged
management’s assumptions on the
purchase price allocation, which resulted in
management revisiting their assumptions.
The purchase price allocation workstream
established a fair value for the Purchase
Consideration, including the estimation of
the fair value of the earn-out (the additional
consideration payable to the vendor
contingent on business performance),
before deducting acquired net assets to give
Excess Consideration for allocation to the
value of Brand asset acquired and residual
Goodwill. The brand asset was determined
to have a 15-year useful economic life,
which reflects that The Spice Tailor is a
younger brand with significant growth
potential. A relief from royalty approach was
then taken to value the brand asset, with
the remaining Excess Consideration being
residual goodwill representing the benefit of
acquiring the brand, together with the other
assets, as a going-concern that operates as
a business. Further information is set out in
note 28 to the Group financial statements
on pages 168 and 169.

Non-trading items
In identifying non-trading items,
management have applied judgement
including whether i) the item is related to
underlying trading of the Group; and/or ii)
how often the item is expected to occur.

The Committee reviewed items that have
been considered ‘non-trading’, and provided
challenge to management, in order to
ensure these items do require separate
disclosure by virtue of their nature and size,
so that the users of the financial statements
obtain a clear and consistent view of the
Group’s underlying trading performance.
Following this review, the Committee
confirmed that the approach taken was
appropriate.

Carrying value of the Parent Company’s
investments in subsidiaries
The carrying value of the Parent Company’s
investments in its subsidiaries is a significant
item on the Parent Company’s balance
sheet. The investment is reviewed annually
for impairment by management and the
Committee. The cash flow forecasts used
in the impairment model are based on the
latest Board-approved five-year Strategic
Plan, sensitivities then being applied to
reflect the potential impact of inflation, the
cost of living crisis and impact of climate
change in line with RCP 8.5. This year’s
review concluded that no impairment
of the Parent Company’s investment in
its subsidiaries was required. Further
information is set out in note 4 to the Parent
Company’s financial statements on pages
175 and 176.

Defined benefit pension plans
The Group operates several defined benefit
schemes. The schemes are closed to
future accrual but hold substantial assets
and liabilities. With effect from 30 June
2020, the Premier Foods Pension Scheme
(PFPS) and Premier Grocery Products
Pension Scheme (PGPPS) were merged on
a segregated basis with the RHM Pension
Scheme. Valuation of the scheme liabilities
is based on a number of assumptions, such
as inflation, discount rates and mortality
rates, each of which could have a material
impact on the valuation under IAS 19
included in the balance sheet. The Group’s
RHM Pension Scheme also holds assets
for which quoted prices are not available.
As at 1 April 2023, the RHM Pension
Scheme reported a surplus of £948.3m
and the Premier Schemes reported a
deficit of £182.8m (FY21/22: RHM Pension
Scheme surplus of £1,138.8m; Premier
Schemes deficit of £193.9m). Asset values
and liabilities fell in both sections of the
schemes, due to lower return on scheme
assets, reducing pension asset valuations,
and changes in financial assumptions,
being a higher discount rate, reducing
liabilities. Following discussions between
PwC and management, an enhanced
methodology was introduced for the receipt
of asset valuations at the balance sheet
date. The Committee reviewed the basis
for management’s assumptions and the
movements in the IAS 19 valuation in detail
over the year. The financial assumptions
were based on the same methodology as
last year. Further information is set out in
note 14 on pages 151 to 156.

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWDirectors’ remuneration report

Annual Statement
Dear shareholder,
On behalf of the Board, I am pleased to
present the Directors’ remuneration report
for the 52-week period ended 1 April 2023.

Overview of performance
The business delivered a very strong
performance over the year, further
demonstrating the strength and resilience
of its branded growth model, against the
backdrop of a particularly challenging
consumer environment. The business
continued to invest in its supply chain to drive
efficiencies. The Group’s brands grew by 9.1%
versus last year, benefitting from the launch
of insight-driven new products. Revenue
growth of products in new categories, such as
Ambrosia porridge and Mr Kipling ice cream,
has increased by 33% compared to prior year.
International revenue increased by 10.0%,
with growth in markets such as Australia,
Europe and Canada. In July 2022, the Group
announced the purchase of The Spice Tailor
and the integration of the UK business
has now been completed. The Spice Tailor
represents a highly complementary business
and delivered revenue growth of 25.0% in the
year (on a 12 month pro forma basis).

The current economic climate has,
undoubtedly, been challenging for the
business, its consumers, customers and
colleagues. A key feature of the Group’s
brand activation has been helping people
to cook and prepare nutritious and tasty
meals more affordably at home, through
the ‘Best Restaurant in Town’ campaign,
demonstrating the versatility of the
Group’s broad range of brands. We have
also continued to work constructively with
customers to deliver plans to drive mutual
category growth.

The business has also continued to invest in
the supply chain, with a number of major
projects to improve efficiency, reduce cost
and support long-term sustainable growth.

Revenue of £1,006.4m was +11.8% versus
prior year and Trading profit of £157.5m
was +11.5% versus last year, both ahead
of analyst expectations. Net debt, which
included the impact of the acquisition
of The Spice Tailor, reduced to £274.3m.
Taking into consideration the economic
headwinds over the past 12 months, the
Board believes that these represent a very
strong set of results.

Annual Bonus performance outcome for FY22/23
As highlighted in the CEO review, the Group has made good progress with the execution of
the Group’s growth strategy, delivering strong Trading profit and operating cash flow, resulting
in both of the stretching financial targets being exceeded. The Committee also assessed
the non-financial targets set for the CEO and CFO, which were based on strategic and ESG
objectives and, following strong performance against the stretching objectives set, it was
determined that both the CEO and CFO had fully achieved these objectives.

In assessing the annual bonus outcome, the Committee also undertook a review of
each director’s individual performance, the overall performance of the business and the
experiences of key stakeholders, including shareholders, employees, suppliers and customers.
This resulted in the Committee awarding a bonus of 100% of maximum to Alex Whitehouse
(£661,407, representing 125% of salary) and a bonus of 100% of maximum to Duncan Leggett
(£363,125, representing 100% of salary). Full details of the targets and performance over the
period are provided on pages 102 and 103.

One-third of the annual bonus payment will be made in the form of shares, deferred for
a three-year period under the Deferred Bonus Plan (DBP). Details of the DBP are set out
on page 105.

LTIP
The Committee assessed the performance conditions for the 2020 LTIP award. TSR
performance was above the upper quartile compared to the FTSE All-Share comparator group
(positioned between 1st and 2nd out of 372 companies), and adjusted EPS of 12.9p exceeded
the maximum target set, meaning that both elements of the award will vest in full in June
2023. Full details of the targets and performance over the period are provided on page 104.

When assessing the annual bonus and LTIP outcomes, the Committee undertook an
assessment ‘in the round’, to ensure that the outcomes are a fair reflection of overall
Company performance and aligned with the experience of other stakeholders. As part of
this, the Committee took into account the strong performance context, set out earlier in
this letter, as well as the fact that the success of the business over the last three years, has
been shared with colleagues and has resulted in a significant increase in the share price and
creation of shareholder value. Colleagues have also been able to benefit from this share price
growth, through participation in the Group’s Sharesave scheme and the 2019 Award, which
vested on 1 February 2023, provided a return of 284% (based on the share price on the date
of vesting). The increased financial strength of the business enabled the reintroduction of
dividend payments in 2021, and a final dividend for FY22/23 of 1.44p per share has been
recommended by the Board, representing an increase of 20% versus prior year.

Taking all of the above into account, alongside the wider performance context detailed
elsewhere in the annual report, the Committee considered that the annual bonus and LTIP
outcomes are a fair reflection of Company and individual performance in the year. As such,
the Committee has not exercised its discretion to adjust the formulaic outcomes.

Executive directors’ salary
Both the CEO and CFO received a salary increase of 5% in FY22/23, effective from 1 July
2022, which was in line with all colleagues not involved in collective bargaining. This took
into account performance of the Group and the individuals, as well as market positioning.

Executive director
Alex Whitehouse
Duncan Leggett

Salary as at
1 April 2023

£535,500
£367,500

Change

+5.0%
+5.0%

Salary as at
2 April 2022

£510,000
£350,000

The salary increase for executive directors for FY23/24, which will apply from 1 July 2023,
will be disclosed in next year’s Directors’ Remuneration Report. In line with shareholder
guidance, salary increases will be lower than the average rate of increase for colleagues.
The Committee will continue to keep the executive directors’ salaries under review as the
Company’s size and complexity continues to increase.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 20232023 Director’s Remuneration Policy
review and arrangements for FY23/24
Our Directors’ Remuneration Policy is due to
be put to a binding shareholder vote at this
year’s AGM. Since our current Policy was
approved at the 2020 AGM, we have made
significant progress with the turnaround
of the business, the completion of the
transformational agreement for our legacy
pension schemes, the sale of our 49%
investment in the Hovis business, and the
issue of new £330m Fixed Rate Bonds due
in October 2026. The business now has a
far stronger balance sheet, with Net debt
in FY22/23 of £274.3m which is 36% lower
than three years ago. At the same time, we
have continued to make strong strategic
progress, with sustained revenue and profit
growth ahead of market expectations.

The last three years have seen us strengthen
our category-leading brands, including
growing market share and building on their
strong brand equities. We have also grown
our international business through the
application of our brand-building capabilities
and executional focus in our priority markets.
The strong operational and strategic
performance, over the last three years, has
seen the Group become an established
member of the FTSE 250 index, with a current
market capitalisation of over £1bn, which is
more than three times larger than the start of
FY20/21 when we last reviewed our Policy.

Over the course of the year, the Committee
has carefully reviewed the current Policy
and is satisfied that the overall structure
(fixed pay, annual bonus and LTIP) remains
appropriate for Premier Foods, and that
it continues to support the delivery of our
strategy and the generation of long-term
sustainable shareholder value. Therefore, no
changes are proposed to the structure of pay.

While the Committee believes that
the overall Policy framework remains
appropriate, we are proposing to increase
the annual bonus and LTIP opportunities to
ensure that our incentive levels are suitable,
given the significant progress the business
has made, as highlighted above. The
Committee, therefore, proposes to:

• Increase maximum annual bonus

opportunities by 25% of salary for each
of the executive directors for FY23/24
onwards. The CEO’s maximum bonus
opportunity will increase from 125%
to 150% of salary, and the CFO’s bonus
opportunity will increase from 100% to
125% of salary; and

• Increase maximum annual LTIP

opportunities by 50% of salary for each
of the executive directors for FY23/24
onwards. The CEO’s LTIP opportunity will
increase from 150% to 200% of salary, and
the CFO’s LTIP opportunity will increase
from 100% to 150% of salary.

The Committee recognises that these
increases are material. However, the current
opportunities have fallen behind market
practice for the size and scope of our
organisation, and these increases, therefore,
bring the incentive opportunities more in
line with FTSE 250 norms. The Committee
believes that these incentive opportunities
are a fairer reflection of our organisational
size and the complexity of the executives’
roles, and will better incentivise the continued
growth of the business and the delivery of the
strategy going forward. The targets for the
annual bonus and the LTIP have been set to
be appropriately stretching, recognising the
increased opportunities for FY23/24.

In line with the UK Corporate Governance
Code, the Committee proposes to introduce
a formal post-employment shareholding
guideline under the 2023 Directors’
Remuneration Policy. This guideline will
require departing executive directors to hold
100% of their in-employment shareholding
guideline (or their actual shareholding at
the date of departure, if lower) for the first
year post-cessation, and 50% in the second
year. This guideline will apply to any shares
vesting following the introduction of the
Policy.

In early 2023, as Committee Chair, I consulted
with our major shareholders and the main
institutional voting agencies on the proposed
2023 Directors’ Remuneration Policy. We
had constructive conversations about our
approach to remuneration, and the majority
of our major shareholders were supportive
of the proposals. Feedback from the
consultation was shared with the Committee
and the Board, and taken into consideration
when approving the final proposals for the
2023 Directors’ Remuneration Policy.

Relationship between ESG matters
and remuneration arrangements
The Committee is aware of the increasing
importance of ESG matters for both the
Group and its stakeholders. An element
of ESG has been included in the executive
directors’ annual bonus goals since FY20/21,
with the weighting of this element aligned
for both executives’ annual bonus goals for
FY22/23. ESG will form part of the executives’

annual bonus goals for FY23/24, with these
goals directly linked to the delivery of the
Group’s ESG strategy, the Enriching Life
Plan. In addition, as part of the Committee’s
overall review of the Group’s remuneration
strategy, it ensures that arrangements do not
encourage behaviour that is not aligned with
the Group’s ESG strategy. Further information
regarding the Group’s Enriching Life Plan is set
out on pages 26 to 37.

Wider workforce
This year, the management team has been
conscious of the impact of the cost of living
crisis on the workforce as a whole and,
as a result, two payments were made to
factory-based colleagues over the course
of FY22/23. In addition, reflecting the
Group’s strong performance in FY22/23,
a discretionary bonus was paid to all
colleagues who are not part of the annual
bonus scheme.

During the year, as Workforce Engagement
NED, I have provided updates to the
Remuneration Committee on meetings
held with colleagues across the business,
which covered a range of topics including
engagement on executive remuneration
and how it aligns with pay for the wider
workforce. The Committee also reviewed
information on broader workforce pay policies
and practices, which provided important
context for the decisions on executive pay
taken during the year. The pension levels for
the executive directors are aligned with that
available to the majority of the workforce.
The operation of the annual bonus scheme is
consistent for all participants and any financial
measures are aligned with the overall Group
targets. The executive directors have other
additional constraints on their remuneration
package, which are not applicable to the
wider management population, such as bonus
deferral and the LTIP holding period.

The Group also operates an all-employee
Sharesave Plan, which allows all colleagues
to share in the success of the Group. The
colleague participation rate in this scheme is
currently 34%.

I look forward to receiving your support for
the 2023 Directors’ Remuneration Policy
and the Annual Report on Remuneration at
the 2023 AGM.

On behalf of the Board

Helen Jones
Remuneration Committee Chair

18 May 2023

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWDirectors’ remuneration report

CONTINUED

Overall approach to remuneration
At Premier Foods, the Remuneration
Policy is designed to attract, retain and
motivate a high-calibre management team.
Focus is placed on driving exceptional
performance and creating shareholder value
in a sustainable way, as well as aligning the
interests of the executive directors with
key stakeholders.

The Committee follows the following
broad principles when considering the
design, implementation and assessment
of remuneration, in line with the
recommendations set out in Provision 40
of the 2018 UK Corporate Governance Code:

Clarity – remuneration arrangements
should be transparent and promote
effective engagement with shareholders
and the workforce
The Company’s Remuneration Policy is
designed to support the delivery of the
Group’s strategic objectives, which are
aligned with the long-term interests of
both shareholders and key stakeholders,
including employees. The Committee
is committed to being transparent in
respect of the elements of remuneration,
quantum, the rationale for targets set and
performance outcomes. The work of the
Workforce Engagement NED provides an
opportunity for engagement with colleagues
on executive remuneration. The Committee
engages with shareholders and is keen
to understand their views and priorities.
Recent engagement has included discussion
to understand shareholder views on the
2023 Directors’ Remuneration Policy, which
is submitted for shareholder approval at the
AGM in July 2023 (further information is set
out on pages 93 to 100).

Simplicity – remuneration structures should
avoid complexity and their rationale and
operation should be easy to understand
The Committee believes the current
arrangements for executive directors to
be simple. These consist of the following
elements:

• A fixed element that comprises salary,

pension and taxable benefits.

• A variable element that is subject to

performance conditions and comprises:

− short-term goals via the annual bonus

plan; and

− long-term goals via the Long-Term

Incentive Plan.

The Committee considers that the current
arrangements are clear, easy to understand
and provide an appropriate balance between
fixed and variable remuneration. During the
year, the Committee reviewed the annual
bonus and LTIP measures for the executive
directors and believes that they remained
aligned to the delivery of the Group’s strategy
and that they were suitably stretching.

Risk – remuneration arrangements should
ensure reputational and other risks from
excessive rewards, and behavioural risks
that can arise from target-based incentive
plans, are identified and mitigated
Targets are reviewed to ensure they reflect
the overall risk appetite set by the Board and
that they do not encourage inappropriate
behaviours or excessive risk taking.

Mitigation is provided through the recovery
provisions that apply to both the annual
bonus and LTIP. Malus and clawback
provisions apply in line with current best
practice expectations. In addition, holding
periods are in place for awards under the
Deferred Bonus Plan and LTIP.

Predictability – the range of possible
values of rewards to individual directors
and any other limits or discretions should
be identified and explained at the time of
approving the Policy
The Committee assesses the potential
outcome of future reward by reference to
potential pay-outs that can be received at
a range of outcomes (minimum, mid-point
and maximum), as set out in the proposed
2023 Directors’ Remuneration Policy on
page 93 to 100. In addition, the effect of
future share price growth under the LTIP is
also considered based on a 50% increase in
share price over the period.

Proportionality – the link between
individual awards, the delivery of strategy
and the long-term performance of the
company should be clear. Outcomes should
not reward poor performance
The Committee seeks to ensure that
targets for the annual bonus and long-term
incentives are aligned with the Group’s
strategy and the long-term sustainable
development of the business.

The focus of our remuneration strategy is
on rewarding performance – the majority
of executive remuneration (over 70% at
maximum) is variable and only payable if
demanding performance targets are met.
As set out in the Remuneration Committee

Chair’s letter, recognising the increased
opportunities for FY23/24, the targets for
the annual bonus and the LTIP have been
set to be appropriately stretching. The
majority of variable pay is payable in the
form of shares.

When setting targets for variable elements
of pay, the Committee carefully considers
the targets to minimise the risk of excessive
reward.

When assessing performance against the
annual bonus and LTIP, the Committee also
considers:

• the overall performance of the business;

• the experience of key stakeholders
including shareholders, employees,
suppliers and customers;

• the quality of earnings when assessing

the achievement of financial targets; and

• the market in which the Company

operates.

The Committee retains discretion to
override formulaic outcomes produced
by the performance conditions where, in
the Committee’s view, they do not reflect
the performance of the business over the
period or individual performance, or where
events happen that cause the Committee to
determine that the conditions are unable to
fulfil their original intended role.

Alignment to culture – incentive schemes
should drive behaviours consistent with
company purpose, values and strategy
As part of the preparation of the 2023
Directors’ Remuneration Policy, the
Committee reviewed the overall design
of the Group’s remuneration strategy
and believes that it is consistent with the
Company’s purpose, values and strategy,
and is aligned with the Group’s culture.
When setting the goals for the annual bonus
and LTIP award, the Committee considers
a range of different potential measures, in
order to select those which it believes are
most likely to drive the successful delivery
of the Group’s strategy and are aligned with
shareholders’ interests to deliver earnings
growth and improved shareholder value in
the medium-term (further details are set
out on pages 93 to 100).

Premier Foods plc Annual Report for the 52 weeks ended 1 April 20232023 Directors’ Remuneration Policy
Set out below is the 2023 Directors’ Remuneration Policy. This Policy will be put forward to shareholders for their binding approval at the
AGM on 20 July 2023, and will apply to payments made from this date. Further details regarding the operation of the Policy for FY23/24
can be found on pages 112 and 113.

Total remuneration is made up of fixed and performance-linked elements, with each element supporting different strategic objectives.

Base salary

Benefits

Pension

Link to strategy
To offer a level of retirement benefit in line with
that offered to other UK employees.
Operation
Executive directors may participate in the
Group’s defined contribution scheme on the
same basis as all other new UK employees, or
receive an equivalent cash allowance in lieu of
pension provision.

Executive directors may also pay additional
amounts into this scheme by way of salary
sacrifice, but will not receive any additional
contribution from the Group. Only basic pay
is pensionable.
Maximum opportunity
The maximum contribution or allowance for
executive directors will be in line with that
available to the majority of other UK employees
or, if outside of the UK, a participant’s pension
plan in the relevant country. Currently, this is
either a contribution, or a salary supplement,
of 7.5% of basic pay up to an earnings cap.
This is subject to change if the approach is also
changed for the wider employee population.
Performance
Performance measures: N/A
Performance period: N/A

Link to strategy
To provide a competitive level of employment
benefits.
Operation
The Company typically provides the following
benefits (including the settlement of any tax
thereon):

• cash allowance in lieu of company car;

• fully expensed fuel;

• private health insurance;

• life insurance;

• permanent incapacity benefit;

• IT services;

• professional memberships; and

• other benefits, including allowance

for personal tax and financial planning
(as required).

The Committee may introduce other benefits
if it is considered appropriate to do so.
Executive directors shall be reimbursed for
all reasonable expenses and the Company
may settle any tax incurred.

Where an executive director is required to
relocate to perform their role, appropriate
one-off or ongoing benefits may be provided
(e.g. housing, schooling, etc.).

Maximum opportunity
There is currently no maximum level of benefit
provision. However, when determining benefits,
the Company considers the overall cost and the
provision of benefits for the wider workforce.
Performance
Performance measures: N/A
Performance period: N/A

Link to strategy
To provide an appropriate level of fixed income.

Set at levels to attract and retain talented
individuals with reference to the Committee’s
assessment of:

• the specific needs of the Group by reference
to the size and complexity of the business;

• the specific experience, skills, responsibilities

and performance of the individual; and

• the market rates for companies of

comparable size and complexity and internal
Company relativities.

Operation
Normally reviewed annually (currently with effect
from 1 July) in conjunction with the review for
the wider workforce, although increases may be
effective at other times if considered appropriate.
Maximum opportunity
Whilst the Company does not have a cap on
salaries, increases are normally expected to
be no more than the wider workforce increase
(in percentage terms). However, increases may
be above this level in certain circumstances,
including (but not limited to):

• where an executive director has been

appointed to the Board at a lower than
typical market salary to allow for growth
in the role, subject to performance, their
salary may be increased to move it to typical
market levels as the executive director gains
experience;

• where an executive director has been

promoted, or there has been a change in
scope of the role/responsibilities;

• where there has been a change in market

practice;

• where there has been a change in the size
and complexity of the organisation; and

• other exceptional circumstances.
Performance
Performance measures: Group performance is
taken into consideration when determining an
appropriate level of base salary increase for the
Group as a whole, and personal performance
is taken into account when determining an
appropriate level of base salary increase for the
executive.

Performance period: N/A

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWDirectors’ remuneration report

CONTINUED

Annual bonus

Long-Term Incentive Plan

Link to strategy
Designed to incentivise delivery of the Group’s goals and reward executive
directors for the delivery of the Group’s strategy.
Operation
An annual bonus is subject to performance against measures that are
linked to the Group’s strategy. A maximum of two-thirds of the bonus is
ordinarily paid in cash and a minimum of one-third is ordinarily deferred
into an award of shares under the Premier Foods Deferred Bonus Plan
(‘DBP’), which normally vests after three years.

The rules of the DBP contain a dividend equivalent provision enabling
additional payments to be made as soon as practicable after vested shares
have been delivered to the participant of an amount equivalent to the
dividends that would have been paid on the participant’s vested shares
between the date of grant of the relevant award and the date of vesting.
Any dividend equivalents will normally be paid in shares.

Clawback and malus provisions apply to the annual bonus (both the cash
and share elements).

The Committee may, in its discretion, adjust annual bonus pay-outs if it
considers that the outcome does not reflect the underlying financial or
non-financial performance of the Company or the individual performance
of the participant over the relevant period, or that such a pay-out level is
not appropriate in the context of circumstances that were unexpected or
unforeseen when the targets were set. When making this judgement, the
Committee may take into account such factors as it deems relevant.
Maximum opportunity
Maximum (as a percentage of salary): 150%

2023/24 financial year maximum levels:

• CEO: 150%

• Other directors: 125%
Performance
Performance measures: The Committee shall determine performance
measures for the bonus each year. Performance measures are designed to
promote the delivery of the Group’s strategy and can be made up of a range of:

• financial targets (such as revenue, Trading profit and cash flow),

representing not less than 50% of the total bonus opportunity, with the
remainder being based on:
− non-financial and/or personal targets.

The Committee has the discretion to adjust the performance targets, or
set different performance measures, if events occur where the Committee
considers this appropriate.

No more than 25% of the bonus will pay-out for threshold performance, with
full pay-out taking place for equalling or exceeding the maximum target.

Specific details of the performance measures for the relevant year can be
found in the Annual Report on Remuneration, to the extent that they are
not considered commercially sensitive.

Performance period: Normally one year.

Link to strategy
The Premier Foods Long-Term Incentive Plan (‘LTIP’) provides a clear link
to our strategic goal of delivering profitable growth with sustainable share
price growth over the medium to long-term.
Operation
Under the LTIP, awards may be granted in respect of each financial year.
Awards can be in the form of conditional shares or nil cost options, or in
such other form that the Committee determines has the same economic
effect. Where awards are in the form of nil cost options, participants may
have up to 10 years from grant to exercise awards.

Awards under the LTIP normally vest following the end of a performance
period of three years, subject to performance conditions. They will
normally be subject to a post vesting holding period for two years
following the end of the performance period.

Awards under the LTIP, including the determination of any relevant
performance conditions, will be considered and determined, on an annual
basis, at the discretion of the Committee.

The rules contain a dividend equivalent provision, enabling payments to
be made as soon as reasonably practicable after vested shares have been
delivered to the participant in an amount equivalent to the dividends
which would have been paid on the participant’s vested shares between
the date of grant of the relevant award, and the date of vesting. For nil-cost
options, subject to a holding period, dividend equivalent payments may
be made in respect of the period from the date of grant until the earlier of
the expiry of the holding period, or the day on which the nil cost option is
exercised. Any dividend equivalents will normally be paid in shares.

Clawback and malus provisions apply.

The Committee may, in its discretion, adjust vesting levels if it considers
that such a vesting level is not appropriate, taking into account such factors
as it deems relevant (which may include the overall performance of the
Company, any Group Member or the relevant participant).
Maximum opportunity
Maximum (as a percentage of salary): 200%

2023/24 financial year LTIP award levels:

• CEO: 200%

• Other directors: 150%
Performance
Performance measures: The Committee shall determine performance
measures for awards granted each year. The majority of the LTIP will
normally be based on financial and/or share price related measures, with
the remainder, if any, based on other measures including, but not limited
to, those linked to the delivery of the business or ESG strategies.

Awards granted in 2023 will be subject to a combination of total
shareholder return and adjusted earnings per share.

The Committee has the discretion to amend the performance targets if
events occur which cause the Committee to reasonably consider that it
would be appropriate, and, if the altered performance or target measure is
not materially less challenging to satisfy.

No more than 25% of the LTIP award will vest for threshold performance, with
full vesting taking place for equalling or exceeding the maximum target.

Performance period: Normally three years.

Holding period: Normally two years.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Sharesave Plan

Shareholding requirements

Non-executive director fees

Link to strategy
To offer all employees the opportunity to build a
shareholding in a simple and tax-efficient manner.
Operation
Executive directors are entitled to participate
in any all-employee plans on the same basis
as other employees. The Company currently
operates the HMRC compliant Sharesave Plan
for UK employees. The key terms of the plan will
only be changed to reflect HMRC changes.
Maximum opportunity
Participants in the Sharesave Plan may save
up to the statutory limit (currently £500 per
month, but subject to any lower limit set by the
Committee) over a three-year period, following
which they have the opportunity to buy
Company shares at a price set at the beginning
of the savings period. The limits for any other
all-employee plans will be on the same basis as
for other employees.
Performance
Performance measures: None, other than
continued employment.
Performance period: Three years.

Link to strategy
To align executives’ interests with shareholders,
and encourage long-term shareholding and
commitment to the Company both during and
post-employment.
Operation
Executive directors are expected to retain 50%
of shares from vested awards under the DBP
and the LTIP (other than sales to settle any tax
or NICs due) until they reach their required
multiple of salary in shares (which is currently
200% of salary). The Committee will normally
review progress against the requirements
(which are set out in the Annual Report on
Remuneration) on an annual basis.

Following stepping down from the Board,
executive directors will normally be expected
to maintain 100% of the in-employment
shareholding guideline (or the actual
shareholding if lower) for the first 12 months
following departure from the Board, and 50%
of the in-employment shareholding guideline
(or the actual shareholding if lower) for the
following 12 months.

The Committee retains the discretion to adjust
or waive the shareholding requirements if
it is considered to be appropriate in specific
circumstances (e.g. ill-health).
Maximum opportunity
N/A
Performance
Performance measures: N/A
Performance period: N/A

Link to strategy
Provides an appropriate level of fee to recruit
and retain individuals with a broad range of
experience and skill to support the Board in the
delivery of its duties.
Operation
Fees are normally reviewed annually.

The remuneration of non-executive directors is
determined by the Company Chair and executive
directors. The remuneration of the Company Chair
is determined by the Remuneration Committee.

This includes a Chair’s fee and standard non-
executive fee. Additional fees may be payable
for other responsibilities assumed, or to reflect
additional time commitments, for example
the roles of Committee Chairs and the Senior
Independent Director. Fees are set taking into
account the time commitment required to fulfil
the role and similar practice at other companies.

Any reasonable business-related expenses
(including tax thereon) can be reimbursed.

Benefits may be introduced if appropriate.
Maximum opportunity
Increases are normally expected to be in line
with the market, taking into account increases
across the Group, as a whole, subject to
particular circumstances such as a significant
change in role, responsibilities or organisation.

The aggregate maximum opportunity is in line
with the Company’s Articles of Association
(currently £1,000,000 per annum).
Performance
Performance measures: N/A
Performance period: N/A

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWDirectors’ remuneration report

CONTINUED

1. Notes to the policy table
Notwithstanding the restrictions laid out in the Policy, where the Company has made a commitment to a director, which:

• was in accordance with the prevailing remuneration policy at the time that the commitment was made; and/or

• was made before the director became a director and, in the opinion of the Remuneration Committee, the payment was not in consideration for

the individual becoming a director of the Company;

the Company will continue to give effect to it, even if it is inconsistent with the Remuneration Policy of the Company, which is in effect at
that time.

The Committee operates the Annual Bonus plan, DBP and LTIP according to their respective rules, which include flexibility in a number of
areas. These include:

• the timing of awards and payments;

• the size of an award, within the maximum limits;

• the participants of the plan;

• the performance measures, targets and weightings to be used for the annual bonus plan and long-term incentive plans from year-to-year;

• the assessment of whether performance conditions have been met;

• the treatment to be applied for a change of control or significant restructuring of the Group;

• the determination of a good/bad leaver status and the treatment of awards thereof;

• the ability to settle share awards or dividend equivalents (in whole or in part) in cash, if it considers that circumstances apply where it is

appropriate to do so, for example, where there is a regulatory restriction on the delivery of shares; and

• the adjustments, if any, required in certain circumstances (e.g. rights issues, corporate restructuring, corporate events and special dividends).

Choice of performance measures and approach to target setting
The Committee reviews the performance measures used in the incentive arrangements, on an annual basis, to ensure that they remain
appropriate and aligned to the delivery of the annual business plan and Group strategy. Currently the annual bonus measures consist of
financial (70%) and non-financial (30%) targets. This approach is adopted in order to link pay to the delivery of overall Group performance
measured across a balance of key strategic aims. The targets are set by reference to internal budgeting and strategic plans.

The 2023/24 LTIP grant will continue to use a combination of adjusted earnings per share and relative total shareholder return-based measures
to reflect both an internal measure of Group performance and the delivery of shareholder value. Targets are set taking into account both
internal and external assessments of future performance and what constitutes good and superior returns for shareholders. The Committee also
retains the discretion within the policy to adjust the targets and/or set different measures and/or alter weightings for future awards.

In addition, the Committee also retains the discretion, within the Policy, to amend the existing performance if events happen that cause it
to determine that the conditions are unable to fulfil their original intended purpose.

Malus and clawback
Annual bonus payments may be clawed back for a period of three years, from the date of payment, and DBP share awards have malus and
clawback provisions that apply for a period of three years from the grant date. Malus and clawback provisions apply under the LTIP, until the
third anniversary of the date on which the award vests. The circumstances in which malus and clawback may apply are:

• a material misstatement of financial results;

• an error in assessing performance or in the information/assumptions used;

• serious misconduct by the participant;

• corporate failure; or

• serious reputational damage.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 20232. Remuneration scenarios and weighting
This chart indicates the level of remuneration that could be earned by the current executive directors at minimum, target, maximum and
maximum +50% share price growth under the Company’s current Directors’ Remuneration Policy.

CEO – Alex Whitehouse

CFO – Duncan Legge�

£3,500k

£3,000k

£2,500k

£1,500k

£1,000k

£500k

£0k

Notes:

£1,530k

35%

26%

39%

£593k

100%

Minimum

Target

£2,467k

43%

33%

24%

£3,002k

18%

36%

27%

20%

£1,800k
£1,600k
£1,400k
£1,200k
£1,000k
£800k
£600k
£400k
£200k
£0k

£1,419k

39%

32%

29%

£1,694k

16%

33%

27%

24%

£913k

30%

25%

45%

£408k

100%

Maximum Maximum +
Share Price
Growth (50%)

Minimum

Target

Maximum Maximum +
Share Price
Growth (50%)

Fixed pay Annual bonus PSP Share price Growth

1 As the DBP is a portion of annual bonus, it is included within this segment.
2 The executive directors can participate in the Sharesave Plan on the same basis as other employees. For simplicity, the value that may be received from participating in the Sharesave

Plan has been excluded from the scenario charts.

3 Assumptions when compiling the charts are:

Minimum = fixed pay only (base salary, benefits and pension).
Target = fixed pay plus 50% of the maximum annual bonus opportunity and 50% of the maximum LTIP opportunity.
Maximum = fixed pay plus 100% of the maximum annual bonus opportunity and 100% of the maximum LTIP opportunity.
Maximum +50% growth = fixed pay plus 100% of the maximum annual bonus opportunity and 100% of the maximum LTIP opportunity plus assumed share price growth of 50%
over the three-year performance period.

3. Service contracts
The executive directors have rolling service contracts. The executive directors’ service contracts contain the key terms shown in the
table below. In the event that any additional executive directors are appointed, it is likely that their service contracts will contain broadly
similar terms.

Provision
Remuneration
Change of control

Notice period

Detailed items
Salary, benefits, pension, annual bonus and share incentives entitlements in line with the above Directors’ Remuneration Policy table.
The service agreement does not provide for any enhanced payment in the event of a change of control of the Company. In the event of
the Company serving notice, within 12 months, following a change of control, employment will terminate immediately and the
Company will make a payment in lieu of notice.
Whilst the Board has the discretion to set a notice period of up to 12 months, the standard notice period is six months.

The terms and conditions for the Chair and non-executive directors are set out in their letters of appointment, which are available for
inspection at the Company’s registered office and will be available at the AGM, as with the executive service contracts. The letters of
appointment entitle the non-executive directors and the Chair to receive fees, but do not have provisions on payment for early termination.
The appointment of non-executive directors is for a fixed term of up to three years, which may be terminated by three months’ notice from
either party, with the exception of Mr Kogo, whose appointment is governed by the Relationship Agreement between the Company and
Nissin Foods Holdings Co., Ltd.

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4. External directorships
The Company recognises that its executive directors may be invited to become non-executive directors of companies outside the Company
and that exposure to such non-executive duties can broaden experience and knowledge, which would be of benefit to the Company.
Any external appointments are subject to Board approval (which would not be given if the proposed appointment was with a competing
company, would lead to a material conflict of interest or could have a detrimental effect on a director’s performance). At the discretion of
the Board, the executive director may be able to retain any fees received.

5. Policy on payment for loss of office
The Committee aims to deal fairly with cases of termination, honouring contractual remuneration entitlements, while attempting to limit
excess compensation. The principles that would be followed are:

• The executive directors have rolling contracts. Whilst the Board has the discretion to set a notice period of up to 12 months, the standard

notice period is six months.

• The Company may elect to terminate employment immediately, in circumstances where it considers it to be appropriate, by making a

payment in lieu of notice equivalent to the executive director’s salary, pension and benefits for the notice period. The Committee retains
the discretion to make a payment in lieu of notice as a single lump sum, or in such instalments as are considered appropriate. These
payments are subject to the executive director’s duty to mitigate their loss by finding alternative employment. If the executive director
finds an alternative position, future payments will normally be reduced by the amount of remuneration received by the executive
director pursuant to that alternative remunerated position. Any unused holiday entitlement may also be paid.

• The Company may terminate an executive director’s employment without notice (or payment in lieu) in certain circumstances, including

where they are guilty of gross misconduct or a serious or persistent breach of their service agreement.

• A bonus (where relevant in respect of that bonus year) may be payable where a director’s employment terminates for a ‘good leaver’

reason. Any bonus payable will normally be pro-rated for time served and will be determined at the discretion of the Committee taking
into account performance. Any unpaid bonus for the preceding completed bonus year may also be payable to a ‘good leaver’. Any bonus
payable will normally be subject to the deferral requirements set out earlier, but could, at the discretion of the Remuneration Committee,
be paid entirely in cash and not subject to deferral. There is no entitlement to any bonus (in respect of that or any previous bonus year)
following notice of termination (or cessation of employment) for ‘bad leavers’.

• Any share-based awards, granted to an executive director under the Company’s share plans, will be determined based on the relevant
plan rules or award agreement. The default treatment is that any outstanding awards lapse on cessation of employment. However, in
certain prescribed circumstances, such as death, disability, injury, transfer of the employing company or business out of the Group,
or other circumstances at the discretion of the Committee (taking into account the individual’s performance and the reasons for their
departure), ‘good leaver’ status will be applied. ‘Good leaver’ treatment under the various plans is as follows:
− DBP and LTIP awards will vest on the normal vesting date (unless the Remuneration Committee decides that the awards should vest
on the date of cessation) subject to, in the case of LTIP awards, performance conditions (measured over the original time period or a
shorter period where the LTIP awards vest on cessation of employment), and are normally reduced pro-rata to reflect the proportion
of the performance period actually served. The Remuneration Committee has the discretion to disapply time pro-rating if it considers
it appropriate to do so. However, it is envisaged that for the LTIP awards, this would only be applied in exceptional circumstances. LTIP
awards will normally continue to be subject to the two-year holding period.

• The Remuneration Committee may agree that the Company will pay for the provision of outplacement support and reasonable fees for a

departing executive director to obtain independent legal advice in relation to their termination arrangements.

• Where it is necessary to discharge an existing legal obligation (or by way of damages for breach of such an obligation), or by way of

settlement or compromise of any claim arising in connection with the termination of a director’s office or employment, or by way of
correcting any error or oversight by the Company, the participant or any third party, in respect of their remuneration, the Committee may
make a payment to a departing executive director, or to an executive director who has left the business.

Premier Foods plc Annual Report for the 52 weeks ended 1 April 20236. Recruitment policy
On the recruitment of an executive director, the Committee will aim to align the executive’s remuneration package with the approved Directors’
Remuneration Policy. In addition, the Committee has discretion to include any other remuneration component or award that it feels is
appropriate, taking into account the specific circumstances of the recruitment, subject to the limit on variable remuneration set out in the table
below. The key terms and rationale for any such component would be disclosed as appropriate in the Remuneration Report for the relevant year.

In arriving at a remuneration package, the Committee will take into account the skills and experience of the individual and the market
rate for a candidate. The package should be market competitive, to facilitate the recruitment of individuals of sufficient calibre to lead the
business, but the Committee would intend to pay no more than it believes is necessary to secure the required talent.

The details of the recruitment policy are set out below:

Reward element
Base salary

Pension and benefits

Performance based pay

Notice period
Buy outs

Detailed terms
In line with the above Directors’ Remuneration Policy table. This includes discretion to pay lower base salary with incremental
increases, as new appointee becomes established in the role, as well as discretion to pay a higher base salary to attract the
desired calibre of candidate.
In line with the above Directors’ Remuneration Policy table. Where necessary, the Remuneration Committee may approve the
payment of relocation costs (including any tax thereon) to facilitate recruitment. Flexibility is retained for the Company to pay
legal fees and other costs incurred by the individual in relation to their appointment.
Executive directors are entitled to participate in the Company’s Annual Bonus, DBP and Long-Term Incentive Plans in line with the above
Directors’ Remuneration Policy table. The maximum variable pay (excluding buy outs as referred to below) will be 350% of the base
salary. In its discretion, the Committee may set different performance measures to apply to awards, made in the year of appointment, if
it considers that to be appropriate.
Whilst the Board has the discretion to set a notice period of up to 12 months, the standard notice period is six months.
In order to facilitate external recruitment of executive directors, it may be necessary for the Committee to consider buying out
existing remuneration or contractual entitlements, that would be forfeited on the individual leaving their current employment.
The Committee would seek, where possible, to provide a buy-out structure which was consistent with the forfeited awards in
terms of the form of awards, quantum, vesting period and performance conditions.

To facilitate any buy-out awards outlined above, in the event of recruitment, the Committee may grant awards to a new executive
director relying on the provision in the Listing Rules, which would allow for the grant of awards to facilitate the recruitment of an
executive director.

Other elements may be included in the following circumstances: i) an interim appointment being made to fill an executive director role on a short-
term basis; and ii) if circumstances require that the Chair or a non-executive director takes on an executive function on a short-term basis.

The remuneration for a newly appointed Chair or non-executive director would normally be in line with the structure set out in the policy
table for Chairs and non-executive directors on page 95.

Notes:
1 Should an executive appointment be made for an internal candidate, legacy terms and conditions would normally be honoured, including any accrued pension entitlements and

any outstanding incentive awards.

7. Consideration of employees/wider Group
The remit of the Committee includes the oversight of remuneration for senior management (who are defined as the Group’s Executive
Leadership Team and Senior Leadership Team) as well as reviewing workforce remuneration and related policies, and the alignment of
incentives and rewards with culture. The Group HR Director is a regular attendee at meetings of the Remuneration Committee and is able
to brief the Committee on remuneration levels for the wider workforce and meetings that have been held with employee representative
bodies. The Committee reviews workforce remuneration, salary increases within the Group, and the level of annual bonus awards, as
well as overseeing participation in long-term incentives for below Board level senior management. The Company engages with the wider
workforce on a range of issues, including executive remuneration, through the work of the Workforce Engagement NED, who attends
site-based employee meetings and provides feedback to the Board and Committee, so that the views of the wider workforce can be
taken into consideration. As a result, the Committee is aware of how typical employee total remuneration compares to the potential total
remuneration packages of executive directors and takes this into account when setting policy for executive director remuneration.

Differences in Remuneration Policy for executive directors compared to other employees
The executive directors’ remuneration policy is set within the context of the Group’s remuneration policy for the wider workforce.

The key differences of quantum and structure in pay arrangements between the CEO and the majority of colleagues reflect the different
levels of overall accountability, responsibilities, skill and experience required for the role. The CEO’s pay has a much greater emphasis on
performance-based pay, through the annual bonus and the LTIP. Salaries for management grades are normally reviewed annually (currently
in July each year) and take account of both business and personal performance. Specific arrangements are in place at each site and these
may be annual arrangements or form part of a longer-term arrangement.

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CONTINUED

The majority of management grades participate in the Annual Bonus Plan to ensure alignment with the Group’s strategic priorities.
Senior management participate in long-term incentive arrangements, reflecting their contribution to Group performance and enhancing
shareholder value. All employees are encouraged to own shares in the Company via the Sharesave Plan and, for executive directors,
through the shareholding guideline.

8. Consideration of shareholders’ views
The Remuneration Committee and the Board consider shareholder feedback received in relation to the AGM each year at a meeting
immediately following the AGM and any action required is incorporated into the Remuneration Committee’s action plan for the ensuing
period. This, and any additional feedback received from shareholders from time to time, is then considered by the Committee and as part
of its annual review of remuneration arrangements.

Specific engagement with major shareholders may be undertaken when a significant change in remuneration policy is proposed or if a
specific item of remuneration is considered to be potentially contentious. During the design of the new policy, the Committee consulted
with the major shareholders and the feedback received from the majority of shareholders was supportive.

9. Summary of the decision-making process and key changes to the Remuneration Policy
During the year, the Committee undertook a review of the Directors’ Remuneration Policy and its implementation to ensure that the Policy
supports the execution of strategy and the delivery of sustainable long-term shareholder value. The Committee discussed the content
of the Policy at four Remuneration Committee meetings throughout the year. Throughout the review process, the Committee took into
account the 2018 UK Corporate Governance Code, wider workforce remuneration and emerging best practice in relation to executive
director remuneration. The Committee also considered input from management and our independent advisors, ensuring that conflicts
of interest were appropriately managed (for example, executive directors were not present for the discussions directly related to their
remuneration). The Committee considers that the overall remuneration framework – based on an annual bonus plan plus a performance
share plan – remains appropriate to continue to incentivise management to drive long-term sustainable performance for shareholders. The
proposed policy does, however, differ from the policy that was approved by shareholders at the 2020 AGM in the following areas:

Annual bonus

Long-Term Incentive
Plan (LTIP)
Shareholding

Maximum (as a percentage of salary) has been increased to 150%. Further context is provided in the Remuneration Committee
Chair’s letter.
Maximum (as a percentage of salary) has been increased to 200%. Further context is provided in the Remuneration Committee
Chair’s letter.
Formal post-employment shareholding guideline introduced whereby, following stepping down from the Board, executive
directors will normally be expected to maintain 100% of the in-employment shareholding guideline (or the actual shareholding if
lower) for the first 12 months following departure from the Board, and 50% of the in-employment shareholding guideline (or the
actual shareholding if lower) for the following 12 months.

Other minor changes have been made to the wording of the Policy to aid operation and increase clarity.

The Committee believes that the proposed Policy is clear and transparent and aligned with our culture. The Committee has taken into
account provision 40 of the UK Corporate Governance Code and considers we comply as described below.

We operate a simple incentive framework, with award levels capped and pay outs linked to performance against a limited number of
measures that are well linked to our strategy. Stretching, but fair, targets are set. This ensures that potential reward outcomes are clear and
aligned with performance achieved, with the Committee having the discretion to adjust pay-outs where this is not considered to be the case.

Pay levels are set, taking into account external market levels, as well as internal practice to ensure pay remains competitive, whilst being
equitable within the Company. Malus and clawback and discretion provisions, LTIP holding periods and shareholding guidelines, including
post-employment, are in place to mitigate reputational and other risk.

100

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Annual Report on Remuneration
An advisory vote on the Directors’ Remuneration Report will be put to shareholders at the 2023 AGM. The Committee believes that the
Remuneration Policy operated as intended in the year.

Single figure table for total remuneration (audited)
Single figure for the total remuneration received by each executive director for the 52 weeks ended 1 April 2023 (FY22/23) and the
52 weeks ended 2 April 2022 (FY21/22).

Salary
Taxable benefits1
Pension
Total fixed remuneration
Annual bonus2
LTIPs3, 4
Total variable remuneration
Single figure for total remuneration

Alex Whitehouse

Duncan Leggett

FY22/23
£’000

FY21/22
£’000

FY22/23
£’000

FY21/22
£’000

529
42
14
585
661
1,202
1,863
2,448

508
31
13
552
634
1,520
2,154
2,706

363
25
14
402
363
464
827
1,229

325
21
13
359
325
490
815
1,174

1 The increase in taxable benefits reflects the inclusion of benefits in respect of permanent health insurance, which were not included in the prior year figures. Both directors

were granted an award over 3,751 shares under the all-employee Sharesave Plan on 19 December 2022. An amount of £801 has been included within benefits with respect to
this plan, which represents the 20% discount to the share price immediately prior to the offer (see the executive share awards table on page 107 for more information).

2 One-third of the annual bonus will be deferred into shares for three years, which are awarded under the terms of the DBP. Further details on DBP awards is set out on page 105.
3 The figures for share-based payments for FY22/23 represent an estimate of the value of the 25 June 2020 LTIP awards which will vest in full in June 2023, based on the three-
month average price to 1 April 2023 of 116p. The share price at the date of grant was 69.5p and 40% of the value reported in the single figure is attributable to share price
appreciation in the period (representing £478,955 for the CEO and £184,859 for the CFO) and no discretion has been exercised in relation to this.

4 The FY21/22 share-based award figures have been adjusted to include the value of the 24 September 2020 LTIP, which will vest in full in September 2023, based on the three-
month average price to 1 April 2023 of 116p. The share price at the date of grant was 91.4p and 19% of the value reported in the single figure is attributable to share price
appreciation in the period (representing £505,945 for the CEO and £490,144 for the CFO) and no discretion has been exercised in relation to this. As set out in the 2019/20
Directors’ Remuneration Report, the two executive directors were each entitled to receive a pro rata award under the LTIP in respect of the 2019/20 financial period, to reflect
the award levels of their new roles upon appointment as executive directors. This would ordinarily have been made immediately following appointment in 2019; however,
members of the Board were in a prohibited dealing period, so the actual granting of the awards was delayed until 2020. These had the same performance measures, targets,
and vesting level as the 2019 LTIP award, further details of which was set out in the Directors’ Remuneration Report last year and later in this report on page 104. The FY21/22
share-based award figure for Mr Whitehouse has also been adjusted, in line with statutory reporting requirements, from that in last year’s report, to show the actual value upon
vesting of the 2019 LTIP award on 7 June 2022, based on a share price of 120.8p.

Base salary and fees (audited)
The Committee sets base salary by reference to the size and complexity of the business, based on factors such as market capitalisation,
revenue, market share and total enterprise value.

Following their appointments in 2019, executive director salaries were increased incrementally to move them to around the lower quartile
of the FTSE 250, which the Committee feels is appropriate given the Company’s market capitalisation and its level of turnover, market value
and complexity. The Committee is now comfortable that salaries are positioned appropriately for our current size, and therefore, the salary
increases for executive directors for FY22/23, effective from 1 July 2022, were in line with the 5% increase awarded to all colleagues not
involved in collective bargaining. The Committee will keep base salaries under review as we continue to grow in size and complexity and
may make further step changes in the future if considered appropriate.

Executive director
Alex Whitehouse
Duncan Leggett

Salary as at
1 April 2023

£535,500
£367,500

Change

+5.0%
+5.0%

Salary as at
2 April 2022

£510,000
£350,000

Benefits
Benefits provided for the period related to the provision of car allowance, private fuel, private medical insurance, permanent health insurance
and professional membership.

101

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWDirectors’ remuneration report

CONTINUED

Pension
Under the Company’s current Remuneration Policy, pension entitlements for executive directors are aligned with those available to the
majority of the workforce, which currently equates to a contribution of 7.5% of basic pay up to an earnings cap (£181,800 for the 2022/23
tax year). Executive directors have the right to participate in the Group’s defined contribution (‘DC’) pension plan, with any contribution
above their annual allowance paid as cash. During the year, Alex Whitehouse and Duncan Leggett both participated in the Group’s DC
pension plan. Neither executive director participated in the Group’s Defined Benefit pension scheme by reason of qualifying service.

The table below provides details of the executive directors’ pension benefits in FY22/23:

Alex Whitehouse
Duncan Leggett

Company contributions to the
Group’s DC pension plan
£’000
4
4

Cash in lieu of contributions to
the DC-type pension plan
£’000
10
10

Annual bonus (executive directors) (audited)
Each year, the Committee sets individual performance targets and bonus opportunities for each of the executive directors. Annually, the
Committee reviews the level of achievement against the performance targets set and, based on the Committee’s judgement, approves the
bonus of each executive director. Annual bonus payments are not pensionable.

Performance assessment for FY22/23
In line with the Remuneration Policy, for FY22/23, the CEO and CFO had maximum bonus opportunities of 125% of salary and 100%
of salary, respectively. Performance was measured against targets relating to Trading profit (50% weighting), operating cash flow (20%
weighting), strategic objectives (20% weighting) and ESG (10% weighting).

The Committee undertook a full and detailed review of the performance of each executive director against their financial and non-financial
targets, including a ‘performance in the round’ assessment, which is set out below and in the Committee Chair’s Annual Statement.

As stated earlier in this annual report, despite a number of challenges, the Group delivered a strong set of results in FY22/23. Trading profit
was £157.5m, up +11.5% versus last year, driven by the effectiveness of the Group’s branded growth model performance. Operating cash
flow was £141.9m, up +11.4% versus last year.

The tables below set out performance compared to the financial and non-financial targets set at the start of the year.

Financial measures (audited)

Performance measure
Financial targets (subject to a Trading profit underpin of £141.6m)
Trading profit
Operating cash flow

£141.6m
£115.0m

Threshold
(0%)

Annual bonus FY22/23

Target
(50%)

Stretch
(100%)

Performance
outcome

Weighting

Performance
(% of max
bonus)

£146.6m
£122.0m

£149.6m
£129.0m

£157.5m
£141.9m

50.0%
20.0%
70.0%

102

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Strategic and ESG measures (audited)

Alex Whitehouse

Performance measure
Non-financial targets (subject to a Trading profit underpin of £141.6m)
Strategic

Performance outcome

Knighton: Completed viability exercise and review of strategic options for the Group’s
Knighton site. Reviewed the options, together with costs, timetable, risk and mitigation
plans with the Board, who approved a proposal to enter into a consultation process
with colleagues regarding the future of the site.

Environment, Social
and Governance (ESG)

International expansion: Finalised launch plans for cake in the US market. Following
the completion of a very successful test in over 200 stores, a roll out to further stores is
now underway.

Organisational design: Undertook assessment of the organisational needs of the Group
(including roles, structure and compensation) to support the delivery of the
five-year Strategic Plan. Presented to the Board for approval in March 2023.
People: Continued sponsorship of the Group’s Inclusion and Diversity programme. Female
representation increased within both the Senior Leadership Team and middle management
roles. Approved the launch of a new sponsorship programme.

Product: Increased the range of non-HFSS products with the launch of a number of new
products, including: Mr Kipling Deliciously Good range, Plantastic snack pots, Plantastic
cooking sauces, and Oxo stock pots.

Final outcome

Duncan Leggett

Performance measure
Non-financial targets (subject to a Trading profit underpin of £141.6m)
Strategic leadership

Performance outcome

Inorganic opportunities: Led the financial assessment of M&A activity and the
associated due diligence. Successful integration of The Spice Tailor into the Group.

Environment, Social
and Governance (ESG)

Grow UK core: Successful delivery of cost savings through supply chain and other
efficiency improvement initiatives.

Investor relations: Targeted programme to expand shareholder base with increased
focus on overseas investors.
Reporting: Enhanced TCFD processes and increased compliance with TCFD
requirements for FY22/23. Introduced external assurance for key ESG metrics to further
strengthen processes and provide assurance on targets and performance reporting.

Risk: Strengthened Risk processes to extend beyond the usual three-year time horizon
and to embed climate and other ESG risks. New Director of Audit and Risk appointed to
increase capability in this area.

Final outcome

Performance
(% of max
bonus)

Weighting

20.0%

10.0%

30.0%
100.0%

Performance
(% of max
bonus)

Weighting

20.0%

10.0%

30.0%
100.0%

The Committee considered the executives’ achievements against their strategic and ESG objectives and, in light of the excellent progress
delivered in the year, determined that a 100% pay-out for these elements was appropriate. The Committee considered the formulaic
outcomes of the annual bonus assessment in the context of the current external environment, wider company and individual performance,
the shareholder experience, the customer experience and the treatment of colleagues throughout the rest of the Group.

In addition to the operational highlights set out above, in FY22/23, Premier Foods has created approximately £65m of shareholder value,
and delivered a shareholder return of 7% during the period, outperforming the FTSE 250 index (which was down 8% in the period).

The Committee believes that the executive directors continued to respond both decisively and effectively to the macro-economic challenges
posed by significant inflationary pressures and the cost of living crisis, enabling the Group to perform successfully during FY22/23. In light
of the Group’s excellent financial performance, the strategic progress, and focus on the well-being of employees, the Committee concluded
that the formulaic outcomes of the annual bonus assessment were justified, and that no discretion was required.

103

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CONTINUED

Long-Term Incentive Plan (LTIP)
Performance assessment for the June 2020 LTIP awards (audited)
The performance conditions for the 25 June 2020 LTIP award were based on a relative TSR condition (comprising two-thirds of the award)
and an adjusted EPS condition (comprising one-third of the award). The Committee assessed the two performance conditions in May 2023
and concluded that both the relative TSR target and the adjusted EPS target had been fully achieved, which will result in full vesting of the
LTIP award in June 2023. The TSR of Premier Foods over the three-year performance period was 389%, representing significant shareholder
value creation and was significantly above the upper quartile TSR in the comparator group of circa 54%. The adjusted EPS performance of
12.9p was ahead of target and market consensus. The 2020 LTIP award was granted in June 2020 after the share price had recovered from
an initial fall earlier in the year and was made at a higher share price than the 2019 LTIP awards, therefore there are no ‘windfall gains’
associated with this award. The Committee considered that the vesting reflected the underlying performance of the business and was
appropriate. Details of the vesting outcomes are provided in the table below.

June 2020 LTIP

Performance measure
Relative TSR¹

Adjusted EPS2
% of relevant portion
of award vesting3

Targets

Below
threshold
< Median

Threshold
Median

Weighting
2/3

1/3

< 11.4p

11.4p

Outcome

Actual
performance
1st/2nd out of
372 companies
12.9p

Stretch
Upper
quartile
12.4p

Payout
100%

100%

20%

100%

No. of shares
to vest
Alex
Whitehouse
1,040,145

No. of shares
to vest
Duncan
Leggett
401,459

1 Measured against the constituents of the FTSE All Share Index (excluding investment trusts) at the start of the period.
2 FY19/20 base year adjusted EPS was 8.9p. As disclosed in the 2020/21 Directors’ Remuneration Report, when the Committee initially set the 2020/21 EPS targets, the

corporation tax rate was expected to be reduced from 19% to 17% for the 2023 financial year and the EPS targets were set based on this lower tax rate. The planned reduction
in tax rate was repealed and the 19% corporation tax rate remained in place. The Committee restated the EPS targets to reflect this tax rate change, as previously disclosed.

3 Straight-line vesting between threshold and stretch.

Performance assessment for the September 2020 LTIP awards (audited)
Additional pro rata awards were granted to Alex Whitehouse (449,250 shares) and Duncan Leggett (435,220 shares) on 24 September 2020,
reflecting their increased LTIP opportunities on appointment as CEO and CFO in 2019 (as set out in the table on page 107). The grant of the
awards was delayed until 2020 due the Company being in a prohibited period; however, the performance conditions that applied to these
awards were the same as for the June 2019 LTIP, which, as reported in last year’s Remuneration Report, have now been met in full. The awards
will vest on 24 September 2023. The value of the awards has been included within the FY21/22 LTIPs column in the single figure table on
page 101.

September 2020 LTIP

Performance measure
Relative TSR¹

Weighting
2/3

Targets

Below
threshold
< Median

Threshold
Median

Adjusted EPS2
% of relevant portion of award vesting3

1/3

< 10.1p
0%

10.1p
20%

Outcome

Actual
performance
3rd/4th out of
386 companies
12.1p

Payout
100%

100%

Stretch
Upper
quartile
11.1p
100%

1 Measured against the constituents of the FTSE All Share Index (excluding investment trusts) at the start of the period.
2 FY18/19 base year adjusted EPS was 8.5p.
3 Straight-line vesting between threshold and stretch.

No. of shares
to vest
Alex
Whitehouse
449,250

No. of shares
to vest
Duncan
Leggett
435,220

104

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Scheme interests awarded during the financial year (audited)
Deferred Bonus Plan (DBP)
One-third of any annual bonus payment awarded to executive directors is made in the form of shares. These shares are awarded under
the terms of the DBP, which was approved by shareholders in July 2017. Awards will normally be made within six weeks following the
announcement of the Group’s full year results. The awards will normally vest on the third anniversary of grant and be awarded in the
form of nil cost options (with no performance conditions), which will be exercisable up until the tenth anniversary of grant. The shares are
subject to continued employment and forfeiture and clawback provisions. Details of the DBP award granted as nil cost options on 9 June
2022, based on a share price of 119.36p (representing the closing middle market quotation (MMQ) on the five dealing days prior to the
date of grant), are set out below:

Alex Whitehouse
Duncan Leggett

FY21/22 Annual
bonus

£634,375
£325,060

Bonus deferral
(one-third)

£211,458
£108,353

No. of shares
awarded

177,160
90,778

Deferral period

09.06.22 – 09.06.25
09.06.22 – 09.06.25

LTIP award for FY22/23
Details of the LTIP award, granted in the form of nil-cost options on 9 June 2022, are set out below.

Alex Whitehouse
Duncan Leggett

Basis of
award

150%
100%

Number of shares
awarded

Face value
on award date1

Performance
period

640,918
293,230

£765,000
£349,999

01.04.22 – 31.03.25
01.04.22 – 31.03.25

1 Determined based on the closing MMQ on the five dealing days ending 8 June 2022 of 119.36p.

Performance measure
Relative TSR1
Adjusted EPS2
% of relevant portion of award vesting3

Targets

Weighting

50%
50%

Below
threshold

< Median
< 11.4p
0%

Threshold

Target

Stretch

Median
11.4p
20%

N/A Upper quartile
12.4p
100%

11.9p
50%

1 Measured against the constituents of the FTSE 250 Index (excluding investment trusts) at the start of the period.
2 FY20/21 base year adjusted EPS was 11.0p.
3 Target EPS of 11.9p (at which 50% vests) with straight-line vesting between threshold and target and between target and stretch.

Additional context on these performance measures, weightings and targets was provided in the 2021/22 Directors’ Remuneration Report.

Dilution limits
Awards under certain executive and all-employee share plans may be satisfied using either newly issued shares or shares purchased in
the market and held in the Group’s Employee Benefit Trust (which held 4,511,923 shares as at 1 April 2023). The Group complies with the
Investment Association guidelines in respect of the dilutive effect of newly issued shares. The current dilutive impact of share awards over a
10-year period is approximately 5.0%.

105

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CONTINUED

Share ownership guidelines, vesting and retention periods
To align executive directors’ interests with those of shareholders, executives must hold 200% of salary in shares (valued at year end). The
Committee will review progress against the requirements (see Share ownership guidelines table below), noting that the executive directors
are expected to retain 50% of shares from vested awards under the Deferred Bonus Plan (DBP) and the LTIP (other than sales to settle
any tax or NICs due) until the guideline is reached. Retention periods have been introduced for both the annual bonus scheme and LTIP to
encourage a focus on the long-term sustainable development of the business. One-third of any annual bonus award is deferred into shares
for three years under the DBP and any shares which vest under LTIP awards granted since 2018 will be deferred for a further two-year
period.

Annual bonus (DBP)
LTIP

Y1
●
●

Y2
●
●

Y3
●
●

Y4
●
●

●

Performance period

Retention period

Post-employment shareholding guideline
As set out in the Annual Statement on pages 90 and 91, the Remuneration Committee reviewed the recommendation set out in the UK
Corporate Governance Code as part of its review of the Remuneration Policy, and is proposing to introduce a formal post-employment
shareholding guideline.

Executives will be required to hold 100% of their in-employment guideline (or actual shareholding at departure, if lower) for the first year
post-cessation, and 50% in the second year. Further details can be found in the 2023 Directors’ Remuneration Policy set out on pages 93
to 100.

Share ownership for the wider Group
The Committee recognises the importance of aligning colleagues’ interests with those of shareholders and encourages share ownership in
order to increase focus on the delivery of shareholder return. All members of the ELT participate in the LTIP. Participation in the Sharesave Plan
currently represents approximately 34% of colleagues.

Statement of directors’ shareholding and share interests (audited)
The following table shows executive directors’ interests in Company shares. Awards under the LTIP are subject to a three-year vesting
period and will only vest if stretching performance conditions are met. Awards are also subject to a two-year holding period post vesting.
The figures shown represent the maximum number of shares a director could receive following the end of the vesting period if all
performance targets were achieved in full.

Share ownership guidelines and share interest table (audited) FY22/23
No. of shares
owned as at
2 April 2022

No. of shares
owned as at
1 April 20231

Share
ownership
guideline2

DBP
Awards

LTIP
Awards
(vested)3

Alex Whitehouse
Duncan Leggett

461,703
115,478

452,678
106,811

408%
88%

506,545
216,313

1,913,192
53,833

LTIP
Awards
(unvested)

2,818,386
1,414,312

Sharesave
Awards

15,349
15,349

Total

5,715,175
1,815,285

1 There were no changes in directors’ share interests between year-end and 18 May 2023.
2 The Group’s shareholding guidelines require executive directors to hold 200% of their salary in shares; The percentage stated includes the post-tax value of awards held under

the Deferred Bonus Plan and vested LTIP awards, valued at the share price at year-end.

3 Vested but unexercised nil cost options.

106

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Executive share awards (audited)

Balance
as at
2 April
2022

Date of
grant

Awarded in
the year

Exercised
in the year

Vested
in the
year2

Lapsed
in the
year

Balance
as at
1 April
2023

Option
price

Share
price on
date of
grant

Share
price on
date of
exercise

Date of
vesting/
becomes
exercisable

Alex Whitehouse
LTIP1

13.06.17
08.08.18
07.06.19
25.06.20
24.09.20
10.06.21
09.06.22
25.06.20
10.06.21
09.06.22
Sharesave Plan2 16.12.19
15.12.20
16.12.21
19.12.22

DBP

Duncan Leggett
LTIP1

DBP

13.06.17
25.06.20
24.09.20
10.06.21
09.06.22
25.06.20
10.06.21
09.06.22
Sharesave Plan2 16.12.19
15.12.20
16.12.21

225,852
779,497
907,843
1,040,145
449,250
688,073
–
138,254
191,131
–
8,876
7,531
4,067
–
4,440,519

53,833
401,459
435,220
284,403
–
34,289
91,246
–
8,876
7,531
4,067

19.12.22

–
1,320,924

–
–
–
–
–
–
640,918
–
–
177,160
–
–
–
3,751
821,829

–
–
–
–
293,230
–
–
90,778
–
–
–

3,751
387,759

–
–
–
–
– 907,843
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8,876
–
–
–
–
–
–
907,843
8,876

–
–
–
–

–
–
–
8,876
–
–

–
8,876

–
–
–
–

–
–
–
–
–
–

–
–

–
–
–
–
–
–
–
–
–
–
–
–
–
–
–

–
–
–
–

–
–
–
–
–
–

–
–

225,852
779,497
907,843
1,040,145
449,250
688,073
640,918
138,254
191,131
177,160
–
7,531
4,067
3,751
5,253,472

53,833
401,459
435,220
284,403
293,230
34,289
91,246
90,778
–
7,531
4,067

3,751
1,699,807

–
–
–
–
–
–
–
–
–
–
29.20
71.70
83.20
85.40

40.50
41.20
34.00
69.50
91.40
108.60
120.00
69.50
108.60
120.00
37.20
95.00
104.00
107.40

–
–
–
–
–
–
–
–
–
–
112.00
–
–
–

13.06.20
08.08.21
07.06.22
25.06.23
24.09.23
10.06.24
09.06.25
25.06.23
10.06.24
09.06.25
01.02.23
01.02.24
01.02.25
01.02.26

Maximum
Expiry date

12.06.24
07.08.25
06.06.26
24.06.27
24.09.27
09.06.31
08.06.32
25.06.30
10.06.31
09.06.32
31.07.23
31.07.24
31.07.25
31.07.26

–
–
–
–
–
–
–
–
29.20
71.70
83.20

40.50
69.50
91.40
108.60
120.00
69.50
108.60
120.00
37.20
95.00
104.00

–
–
–
–
–
–
–
–
112.00
–
–

13.06.20
25.06.23
24.09.23
10.06.24
09.06.25
25.06.23
10.06.24
09.06.25
01.02.23
01.02.24
01.02.25

12.06.24
24.06.27
24.09.27
10.06.31
08.06.32
25.06.30
10.06.31
09.06.32
31.07.23
31.07.24
31.07.25

85.40

107.40

–

01.02.26

31.07.26

1 The 2019 LTIP for Mr Whitehouse includes 7,502 shares representing notional dividends paid during the performance period, up until the date of vesting on 7 June 2022.
The Remuneration Committee has determined that the TSR and EPS elements of the 2020 LTIP awards will vest in full in June and September 2023 (see page 104 for more
information).

2 Executive directors are eligible to participate in the Group’s Sharesave Plan on the same basis as all other eligible employees. Mr Whitehouse and Mr Leggett were granted an

award over 3,751 shares under the all-employee Sharesave Plan on 19 December 2022. An amount of £801 has been included within taxable benefits, which represents the 20%
discount to the share price immediately prior to the offer.

107

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CONTINUED

Total shareholder return
The market price of a share in the Company on 31 March 2023 (the last trading day before the end of the financial period) was 122.0p;
the range during the financial period was 92.8p to 127.0p.

The graph shows the value, by 2 April 2022, of £100 invested in Premier Foods plc on 31 December 2012, compared with the value of £100
invested in the FTSE Food Producers Index and FTSE 250 (excluding Investment Trusts) Index on the same date. The Committee considers
these to be the most appropriate comparator indices to assess the performance of the Group, given the Group’s position as a FTSE 250
Food Producer. The other points plotted are the values at intervening financial year-ends.

Share graph

250

200

150

100

)
d
e
s
a
b
e
r
(

)
£
(
e
u
a
V

31/12/2012

31/12/2013

04/04/2015

02/04/2016

01/04/2017

31/03/2018

30/03/2019

28/03/2020

03/04/2021

02/04/2022

01/04/2023

Premier Foods

FTSE 250 (excluding Investment Trusts)

FTSE Food Producers

Chief Executive’s single figure for total remuneration
The table below shows the single figure for total remuneration and the annual bonus and LTIP vesting as a percentage of maximum
opportunity for the previous 10 financial periods.

Year
FY22/23
FY21/22
FY20/21
FY19/20
FY19/20
FY18/19
FY18/19
FY17/18
FY16/17
FY15/16
FY14/15
FY13
FY13

CEO
Alex Whitehouse
Alex Whitehouse2
Alex Whitehouse
Alex Whitehouse1
Alastair Murray1
Alastair Murray
Gavin Darby
Gavin Darby
Gavin Darby
Gavin Darby
Gavin Darby
Gavin Darby
Michael Clarke

Single figure
for total
remuneration

Annual bonus
as a % of
maximum

LTIP
vesting as a % of
maximum

£2,447,797
£2,705,795
£2,025,254
£742,575
£683,776
£158,297
£1,241,708
£1,229,383
£862,455
£1,750,933
£1,736,749
£1,405,753
£1,122,795

100%
100%
100%
81.5%
64.2%
53.0%
60.0%
35.0%
–
57.0%
23.4%
16.0%
–

100%
100%
100%
33.3%
33.3%
–
–
–
–
–
–
–
–

1 Alex Whitehouse was appointed as CEO on 30 August 2019 and Alastair Murray stepped down as Acting CEO and Chief Financial Officer.
2 The figures for FY21/22 have been adjusted, in line with statutory reporting requirements, to show the actual value upon vesting of the LTIP award on 7 June 2022. Full details of

the single figure for total remuneration are set out on page 101.

108

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Percentage change in remuneration of directors and employees
For the purpose of this table, remuneration is defined as salary, benefits and annual bonus. The increase in benefits for executive directors reflects
the inclusion of private health insurance in FY22/23. Where directors have been appointed part way through the prior financial year, comparative
figures have been calculated using an annualised figure. Tania Howarth, Lorna Tilbian and Roisin Donnelly were appointed as non-executive
directors on 1 March, 1 April and 1 May 2022, respectively. Yuichiro Kogo does not receive a fee. The directors are the only employees of the
Company, so the average pay of colleagues in the wider Group has also been included for the purposes of comparison.

Change in pay FY22/23

Change in pay FY21/22

Change in pay FY20/21

Base salary
% Change
FY22/23

Benefits
% Change
FY22/23

Annual
bonus
% Change
FY22/23

Base salary
% Change
FY21/22

Benefits
% Change
FY21/22

Annual
bonus
% Change
FY21/22

Base salary
% Change
FY20/21

Benefits
% Change
FY20/21

Annual
bonus
% Change
FY20/21

Executive directors
Alex Whitehouse
Duncan Leggett
Non-executive directors
Colin Day
Richard Hodgson
Simon Bentley
Roisin Donnelly
Tim Elliott
Tania Howarth
Helen Jones
Yuichiro Kogo
Lorna Tilbian
All Group employees

+4.3%
+11.7%

+8.5%
0%
0%
0%
0%
0%
+12.9%
–
0%
+11.1%

+34.5%
+21.8%

+4.2%
+11.7%

+3.2%
+12.5%

+0.2%
-1.8%

+1.5%
+9.1%

+5.3%
+12.7%

-5.7%
+4.5%

–
–
–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–
–
-31.2%

+0.8%
0%
0%
–
0%
0%
0%
–
–
-0.8%

–
–
–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–
–
+40.7%

0%
0%
0%
–
0%
0%
0%
–
–
+5.6%

–
–
–
–
–
–
–
–
–
–

+61.4%
+33.1%

–
–
–
–
–
–
–
–
–
+49.3%

Senior management and the wider workforce
The remit of the Committee includes the oversight of remuneration for senior management (who are defined as the Group’s Executive
Leadership Team and Senior Leadership Team) as well as reviewing workforce remuneration and related policies, and the alignment of
incentives and rewards with culture. Remuneration for executive directors is set within the context of the Group’s remuneration policy for
the wider workforce. The key differences of quantum and structure in pay arrangements across the Group reflect the different scope of
roles and levels of accountability required for the role, and that executive directors and senior management have a much greater emphasis
on performance-based pay through the annual bonus and the LTIP.

Salaries for management grades are normally reviewed annually (currently in July each year) and take account of both business and
personal performance. Specific arrangements are in place at each site, which may be annual arrangements or form part of a longer-term
arrangement, and the Board is kept regularly updated on these arrangements.

The Committee reviews the level of salary increases for colleagues not involved in collective bargaining and reviews the annual bonus plan for the
general management population. Financial objectives for executive directors and the management population are aligned and strategic objectives
are cascaded down the management structure. Senior management participate in long-term incentive arrangements, reflecting their contribution
to Group performance and enhancing shareholder value. All employees are encouraged to own shares in the Company via the Sharesave Plan and
executive directors through our shareholding guidelines.

CEO pay ratio
The table on page 110 sets out a comparison of the CEO’s total earnings as compared to the wider workforce, based on colleagues’ pay at
the 25th percentile, median and 75th percentile. Premier Foods is a food manufacturing business employing around 4,000 colleagues, the
majority of whom are based at our manufacturing sites.

We apply the same reward principles for all colleagues – that overall remuneration should be competitive when compared to similar roles
in similar organisations. For manufacturing colleagues, we benchmark against the general pay conditions for similar roles in the relevant
local area, including other food manufacturers. For the CEO, we benchmark against salaries at companies with a similar level of turnover,
enterprise value and complexity. The key differences of quantum and structure in pay arrangements, between the CEO and the majority of
colleagues, reflect the different levels of overall accountability, responsibilities, skill and experience required for the role. The CEO’s pay has
a much greater emphasis on performance-based pay through the annual bonus and the LTIP. The ratios may, therefore, vary significantly
year-on-year, depending on bonus and LTIP outcomes.

109

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CONTINUED

Year
FY22/23
FY21/22
FY20/21
FY19/20
FY21/22
FY21/22

Method
B
B
B
A
Base salary
Total pay and benefits

25th percentile
74:1
93:1
82:1
60:1
£26,972
£29,085

Median
71:1
78:1
61:1
49:1
£24,729
£34,540

Pay ratio
75th percentile
57:1
61:1
49:1
35:1
£40,524
£44,613

The CEO single figure for total remuneration was £2,447,797 (FY21/22: £2,705,795), as set out on page 108 of this report. The single figure
(and associated percentile ratios) for FY21/22 have been adjusted to include the value of the 24 September 2020 LTIP award and to show the
actual value upon vesting of the 2019 LTIP award on 7 June 2022. The main reason for the change in ratios from last year is a reduction in the
value attributed to the CEO’s vesting LTIP award in FY22/23 compared to the prior year. The Committee confirms that the ratio is consistent
with the Company’s wider policies on employee pay, reward and progression.

The Group has calculated the ratio in line with the reporting regulations using method B, which uses the most recent hourly rate gender
pay gap information for all UK employees of the Company to identify three UK employees as the best equivalents. This uses data which is
already reported externally as part of the Group’s gender pay gap reporting. Due to the fact that the Group has a significant number of part-
time employees and a range of different weekly working hours and shift allowances at various sites, the calculation of comparable full-time
equivalents under method A was considered particularly complex. The results for this year were checked against colleagues’ pay at either side
of the data points selected, to ensure the results were representative and the figures provided are considered to be reflective of pay at the
relevant sites where the colleagues are based. No adjustments or estimates have been used.

The workforce comparison is based on:

1. Payroll data as at 5 April 2022 for all colleagues, including part time colleagues and the CEO, but excluding non-executive directors.

2. Total pay comprising salary and taxable benefits (including shift allowance, overtime, car allowance and performance-related pay) as at
31 March 2023. Employers’ pension contributions are not included in the data under the requirements of the gender pay gap reporting,
but have been included in the total pay and benefits figures for the three colleagues listed in the table above for comparative purposes.

Gender pay gap reporting
Details of gender pay gap reporting are provided on page 182 and the full report is available on the Group’s website.

Payments for loss of office (audited)
There were no payments for loss of office in the year (FY21/22: £Nil).
Payments to former directors (audited)
There were no payments to former directors in the year (FY21/22: £Nil).

Relative importance of spend on pay
The following table sets out the amounts and percentage change in total employee costs and distributions to shareholders (dividends and
share buy backs). The Company has recommended the payment of a final dividend of 1.44p per share for the financial period, subject to
shareholder approval at the AGM in July 2023, which represents a 20% increase on the prior year.

Total employee costs
Distributions to shareholders

FY22/23

£209.2m
£10.3m

FY21/22

£183.0m
£8.5m

Increase/
Decrease

+14.3%
+21.2%

Non-executive directors
Fees payable to non-executive directors are determined by the Board. The level of fee is set in the context of the time commitment and
responsibilities required by the role. As a result, additional fees are payable to the Chairs of the Audit and Remuneration Committees and
for the role of Senior Independent Director. No change has been made to the basic NED fee since 2009.

110

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Non-executive directors (audited)
Single figure for the total remuneration received by each non-executive director for the financial periods ended 1 April 2023 and 2 April 2022.

Director
Colin Day
Richard Hodgson
Simon Bentley
Roisin Donnelly1
Tim Elliott
Tania Howarth1
Helen Jones
Yuichiro Kogo2
Lorna Tilbian1

Former directors:
Pam Powell1
Daniel Wosner1,2

Fees
£
235,000
67,000
70,000
52,250
57,000
57,000
64,333
–
57,000

20,625
–

FY22/23

Expenses3
£
1,644
–
–
672
1,308
628
–
–
687

–
–

Total
£
236,644
67,000
70,000
52,922
58,308
57,628
64,333
–
57,687

20,625
–

Fees
£
216,667
67,000
70,000
N/A
57,000
4,750
57,000
–
N/A

67,500
–

FY21/22

Expenses
£
334
–
–
–
509
–
–
–
N/A

207
–

Total
£
217,001
67,000
70,000
N/A
57,509
4,750
57,000
–
N/A

67,707
–

1 Tania Howarth, Lorna Tilbian and Roisin Donnelly were appointed as non-executive directors on 1 March, 1 April and 1 May 2022, respectively. Pam Powell and Daniel Wosner

both retired as directors at the AGM on 20 July 2022.

2 Yuichiro Kogo and Daniel Wosner were appointed pursuant to relationship agreements with two of our major shareholders and did not receive a fee for their roles as

non-executive directors.

1 Expenses relate to taxable travel costs in connection with the attendance at Board and Committee meetings during the year. The amounts in the table above include the grossed-up

cost of UK tax paid by the Company on behalf of the non-executive directors.

Non-executive directors’ fees
The fees of our non-executive directors (NEDs) are set out below. No increases were awarded in FY22/23.

Chair’s fee
Basic NED fee
Additional remuneration:
Audit Committee Chair fee
Remuneration Committee Chair fee
Senior Independent Director fee

1 April
2023
£235,000
£57,000

£13,000
£10,500
£10,000

Change
–
–

–
–
–

2 April
2022
£235,000
£57,000

£13,000
£10,500
£10,000

Non-executive directors’ terms of appointment
All non-executive directors have entered into letters of appointment/amendment as detailed in the table below. The appointments are
subject to the provisions of the Companies Act 2006 and the Company’s Articles. Terms of appointment are normally for three years or
until the date of the AGM immediately preceding the third anniversary of appointment. Non-executive directors’ continued appointments
are evaluated annually, based on their contributions and satisfactory performance. Following the expiry of a term of appointment, non-
executives may be reappointed for a further three-year period. The terms of appointment for Yuichiro Kogo are governed by the terms of
the relationship agreement between the Company and Nissin, our largest shareholder.

Director
Alex Whitehouse
Duncan Leggett
Colin Day
Richard Hodgson
Simon Bentley
Roisin Donnelly
Tim Elliott
Tania Howarth
Helen Jones
Yuichiro Kogo
Lorna Tilbian

Date of original appointment
30 August 2019
10 December 2019
30 August 2019
6 January 2015
27 February 2019
1 May 2022
15 May 2020
1 March 2022
15 May 2020
25 March 2021
1 April 2022

Expiry of current
appointment/amendment
letter
–
–
AGM 2025
AGM 2023
AGM 2024
AGM 2025
AGM 2023
AGM 2024
AGM 2023
–
AGM 2024

Notice period
6 months
6 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
–
3 months

111

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWDirectors’ remuneration report

CONTINUED

Non-executive directors’ interests in shares (audited)

NED
Colin Day
Richard Hodgson
Simon Bentley
Roisin Donnelly1
Tim Elliott
Tania Howarth1
Helen Jones
Yuichiro Kogo2
Lorna Tilbian1
Former directors:
Pam Powell1
Daniel Wosner1

Ordinary shares owned
as at
1 April 20233
200,000
–
–
45,651
10,000
–
10,000
–
–

Ordinary shares owned
as at
2 April 2022
200,000
–
–
N/A
10,000
–
10,000
–
–

160,366
72,850

1 Tania Howarth, Lorna Tilbian and Roisin Donnelly were appointed as non-executive directors on 1 March, 1 April and 1 May 2022, respectively. Pam Powell and Daniel Wosner

both retired as directors at the AGM on 20 July 2022.

2 Yuichiro Kogo is a shareholder representative director appointed pursuant to a relationship agreement with Nissin, our largest shareholder.
3 There were no changes in directors’ share interests between year-end and 18 May 2023.

Statement of implementation of the remuneration policy in FY23/24
The arrangements set out below are subject to the approval of the 2023 Directors’ Remuneration Policy by shareholders at the AGM in
July 2023.

Base salary and fees
The table below shows the base salaries of the executive directors as of 1 April 2023.

Executive director
Alex Whitehouse
Duncan Leggett

Salary as at
1 April 2023

£535,500
£367,500

The salary increase for executive directors for FY23/24, which will apply from 1 July 2023, will be disclosed in next year’s Directors’
Remuneration Report. In line with shareholder guidance, salary increases will be lower than the average rate of increase for colleagues. The
Committee will continue to keep the executive directors’ salaries under review as the Company’s size and complexity continues to increase.

Benefits
Benefits for FY23/24 will be in line with the approved Remuneration Policy.

Pension
Pension entitlements for FY23/24 will be in line with the approved Remuneration Policy and on the same basis as that offered to the
majority of the workforce (currently a salary supplement of 7.5% of base salary up to an earnings cap).

Annual bonus measures for FY23/24
The Committee agreed that, for FY23/24, the financial targets would represent 70% of the total bonus opportunity. The performance measures
will be linked to the Group’s strategy to focus on revenue growth, cost efficiency and cash generation with the aim to deliver the Group’s growth
strategy. As with last year, the financial targets comprise Trading profit and operating cash flow goals. Trading profit is a Group KPI (see page 56).

Non-financial objectives are focused on strategic opportunities to drive sales, generate cost savings and improve free cash flow in support of the
Group’s growth strategy. The element relating to ESG is aligned with the delivery of the Group’s ESG strategy, the Enriching Life Plan (see pages 26
to 37 for more information). The Board considers the financial targets and the non-financial targets to be commercially sensitive, but has agreed
that they will be disclosed as part of the performance assessment in next year’s annual report. The financial and non-financial targets both contain
Trading profit underpins.

As set out earlier in the report, the Committee is proposing to increase the annual maximum bonus opportunities by 25% of salary for each of the
executive directors for FY23/24 onwards, subject to shareholder approval of the 2023 Directors’ Remuneration Policy in July 2023. Recognising the
increased opportunity, the Committee has set stretching targets for the one-year performance period. One-third of any annual bonus awarded in
respect of FY23/24 will be deferred in shares for three years under the Deferred Bonus Plan.

112

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Maximum opportunity as a % of salary
Performance measure
Financial objectives (subject to a Trading profit underpin)
Trading profit
Operating cash flow

Non-financial objectives (subject to a Trading profit underpin)
Strategic
Environmental, Social and Governance

Alex Whitehouse

Duncan Leggett

150%
Weighting

125%
Weighting

50%
20%
70%

20%
10%
100%

50%
20%
70%

20%
10%
100%

LTIP award for FY23/24
As set out earlier in the report, the Committee is proposing to increase the annual maximum LTIP opportunities by 50% of salary for each
of the executive directors for FY23/24 onwards, subject to shareholder approval of the 2023 Directors’ Remuneration Policy in July 2023.
For the FY23/24 award, the Committee proposes to use the same measures and weightings as for the FY22/23 LTIP award, i.e. relative TSR
(50%) and adjusted EPS (50%), which are aligned with the Group’s growth strategy to focus on revenue and profit growth, cost efficiency,
cash generation and investment in the business in order to generate sustainable shareholder return over the medium-term.

The Committee believes that these measures are fully aligned with the interests of shareholders and that awards will only vest following the
achievement of stretching performance targets.

The TSR condition requires at least a median ranking to be achieved for 20% of this part of the award to vest, with full vesting taking
place for an upper quartile ranking against the constituents of the FTSE 250 Index (excluding investment trusts), which is considered an
appropriate index to use as the Company is now an established member of the FTSE 250 Index.

The adjusted EPS target is 12.8p, with a range of 12.3p at threshold to 13.3p at maximum, which represents a circa 8% increase on the prior
year’s targets. In setting these targets, the Committee took into account the Group’s five-year strategic plan and the impact of the change
in corporation tax rate from 19% to 25%. The Group currently retains brought-forward losses, which it can utilise to offset against future tax
liabilities and, therefore, tax is largely a non-cash item for Premier Foods. The Committee noted that a notional tax charge is included for
the purposes of calculating EPS and, therefore, the increase in tax rate would reduce the EPS outcome in FY25/26. The Committee has set
stretching targets for the three-year performance period, recognising the increased opportunity for FY23/24. The targets have been set to
ensure that participants are motivated to deliver shareholder value without excessive risk-taking. In line with its usual approach, the Committee
will review performance in the round to ensure that final vesting outcomes reflect the broader business and individual context in the period.

Alex Whitehouse
Duncan Leggett

Performance measure
Relative TSR1
Adjusted EPS
% of relevant portion of award vesting2

Basis of award

Face value on
award date

Performance
period

200%
150%

£1,071,000
£551,250

01.04.23 – 31.03.26
01.04.23 – 31.03.26

Targets

Weighting

50%
50%

Below
threshold

< Median
< 12.3p
0%

Threshold

Target

Stretch

Median
12.3p
20%

N/A Upper quartile
13.3p
100%

12.8p
50%

1 Measured against the constituents of the FTSE 250 Index (excluding investment trusts) around the start of the period.
2 Target EPS of 12.8p (at which 50% vests) with straight-line vesting between threshold and target and between target and stretch.

The Committee
Details of the Committee members and their meeting attendance are set out on page 75. I was appointed as Chair of the Remuneration
Committee on 20 July 2022, having served as a member of the Remuneration Committee for two years. Throughout the financial period, all
members of the Committee have been independent. In addition, the Chair of the Board, CEO, HR Director and the remuneration advisers
attended Committee meetings by invitation. In accordance with the Committee’s terms of reference, no one attending a Committee meeting
may participate in discussions relating to his/her own terms and conditions of service or remuneration. Over the course of the year, the
Committee held five scheduled meetings.

113

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWDirectors’ remuneration report

CONTINUED

Role of the Remuneration
Committee
The Committee has been delegated
authority by the Board to approve the
overall design of the Remuneration Policy for
executive directors and senior management,
to agree the terms of employment, including
recruitment and termination terms of
executive directors, approve the design
of all share incentive plans, recommend
appropriate performance measures
and targets for the variable element of
remuneration packages, and determine
the extent to which performance targets
have been achieved. The Committee’s
remit has also been extended to review the
remuneration arrangements for the wider
workforce and to ensure there is alignment
between the Group’s remuneration
arrangements and culture.

The key activities of the Committee during
the financial period were as follows:

• Undertook a detailed review of

remuneration arrangements for executive
directors, as part of the preparation of
the 2023 Directors’ Remuneration Policy,
and undertook an engagement exercise
with major shareholders to understand
their views;

• Reviewed remuneration arrangements
for the ELT to ensure they continue to
support the Group’s evolving strategy,
and aid the retention and recruitment of
senior management;

• Together with the Board, received

regular updates on the remuneration
arrangements for the wider workforce,
the impact of the cost of living crisis on
colleagues, site pay negotiations, and the
options to extend long-term incentive
arrangements for management below
the ELT;

• Reviewed and discussed developments
in best practice in order to keep the
Committee up to date with current
market practice;

• Reviewed the voting results for the 2022

Directors’ remuneration report;

• Reviewed the FY22/23 salary increase

for colleagues not involved in collective
bargaining;

• Reviewed and recommended executive
directors’ and senior managers’ annual
bonuses in respect of the financial period,
and set the targets for the FY22/23
annual bonus, ensuring they were aligned
with the strategic objectives of the Group;

• Granted the 2022 awards under the
Company’s all-employee plans and
monitored colleague participation; and

• Granted the 2022 awards under the
Company’s executive share plans to
executive directors and senior managers
and agreed the targets for awards due
to be made in 2023, ensuring they are
aligned with the strategic objectives of
the Group.

Committee evaluation
As part of the internal Board evaluation
exercise conducted during the year (see
page 78 for more information), a review
of the Committee’s effectiveness was
also undertaken. The review included
the management of meetings, quality of
papers and presentations, an assessment
of overall remuneration strategy and
whether it supported the delivery of the
Group and ESG strategies, the Committee’s
understanding of remuneration
arrangements for the wider workforce
and the views of key stakeholders. It was
confirmed that the Committee remained
effective and an action plan for the
coming year was agreed. A review was

also undertaken of the performance
of the Committee’s adviser, and it was
confirmed that they had performed
effectively in supporting the Committee
over the period.

Advisers
Following a tender exercise undertaken in
2020, Deloitte LLP (‘Deloitte’) was appointed
as adviser by the Committee in January
2021. The Deloitte engagement team have
no other connection with the Group or
its directors that is considered to impair
their independence. Deloitte also provided
advice to the Group in relation to tax and
internal control during the year. Deloitte is
a founding member of the Remuneration
Consultants Group and, as such, adheres
to its Code of Conduct. The Committee
is satisfied that the advice received from
Deloitte is objective and independent.
During the financial period, Deloitte
received fees of £88,250 (FY21/22: £68,950)
on a time and material basis, in respect
of their advice to the Committee.

External appointments
The Board is open to executive directors who
wish to take on a non-executive directorship
with a publicly quoted company in order to
broaden their experience. Executives may
be entitled to retain any fees they receive.
However, any such appointment would be
reviewed by the Board on a case-by-case
basis. The current executive directors do not
hold any external appointments with publicly
quoted companies.

Statement of voting at the Annual
General Meeting
The details of the voting on the resolutions
at the AGM held on 20 July 2022 are set out
below (full details of the voting results for
each resolution are available on the Group’s
website: www.premierfoods.co.uk).

Date of AGM
Votes for
Votes against
Total votes cast
Votes withheld

Approval of
Directors’
Remuneration
Report FY21/22

20 July 2022
697,295,750
4,844,276
702,140,026
93,086

% of votes
cast

99.31%
0.69%
100%

Approval of the
current Directors’
Remuneration
Policy

12 August 2020
569,672,002
19,748,413
589,420,415
229,811

% of votes
cast

96.65%
3.35%
100%

The Directors’ Remuneration Report was approved by the Board on 18 May 2023 and signed on its behalf by:

Helen Jones
Remuneration Committee Chair

114

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Other statutory information

Directors’ report
The directors’ report consists of pages 08 to 118 and has been drawn up and presented in
accordance with, and in reliance upon, applicable English company law, and the liabilities of
directors in connection with that report shall be subject to the limitations and restrictions
provided by such law. In the directors’ report, references to the Company or Group, are
references to Premier Foods plc and its subsidiaries.

The Directors’ report is covered on pages 115 to 118, as well as in the following sections of
this annual report:

Item
Financial risk management
Current Board membership
Governance report
Strategic report
Risk management and viability statement
Employee engagement
Directors’ remuneration report
Share capital
Greenhouse gas emissions
Enriching Life Plan
Enriching Life Plan disclosure Table

Location
Note 19 to the financial statements
Pages 72 and 73
Pages 70 to 89
Pages 08 to 68
Pages 60 to 68
Pages 14 and 15 and pages 34 and 35
Pages 90 to 114
Note 23 of the Financial statements
Page 48
Pages 26 to 37
Pages 178 to 183

The following information, required by Listing Rule 9.8.R, is also incorporated into the
Directors’ report: Details of long-term incentive plans – see Director’s remuneration report on
pages 90 to 114.

Profit and dividends
The profit before tax for the financial year
was £112.4m (FY21/22: profit of £102.6m)
and the directors have proposed a final
dividend of 1.44 pence per share for
the financial period ended 1 April 2023
(FY21/22: 1.2 pence), representing a 20%
increase on the prior year. Subject to
shareholder approval, the final dividend will
be payable on 28 July 2023 to shareholders
on the register at the close of business on
30 June 2023.

Over the last few years, the Group has
made significant progress in deleveraging
the business and reducing Net debt (see
KPIs on page 57); the increased strength of
the business and successful delivery of its
growth strategy has enabled the Company
to reintroduce dividend payments in 2021,
for the first time since 2008.

Research and development
Applied research and development work
continues to be directed towards the
introduction of new and improved
products; the application of new technology
to reduce unit and operating costs; and
to improve service to customers. Total
research and development spend (including
capitalised development costs) was
£14.6m (FY21/22: £11.4m).

Branches
Certain of the Group’s activities are
operated through overseas branches, which
are established in a number of countries
and are subject to the laws and regulations
of those jurisdictions.

Share capital information
The Company’s issued share capital, as
at 1 April 2023, comprised 868,098,210
ordinary shares of 10p each. During the
period, 5,312,933 ordinary shares were
allotted to satisfy the vesting of awards
made under the all-employee Sharesave
Scheme and details of the movements
can be found in note 23 on pages 166 and
167. All of the ordinary shares rank equally
with respect to voting rights and the rights
to receive dividends and distributions on
winding up. In accordance with the Articles,
there are no restrictions on share transfers,
limitations on the holding of any class of
shares or any requirement for prior approval
of any transfer with the exception of certain
officers and employees of the Company,
who are required to seek prior approval to
deal in the shares of the Company, and are
prohibited from any such dealing during
certain periods under the requirements of
the Market Abuse Regulation.

Colleagues who hold shares under the
Premier Foods plc Share Incentive Plan may
instruct the trustee to vote on their behalf
in respect of any general meeting.

The directors were granted authority at the
2022 AGM to allot relevant securities under
two separate resolutions: (i) up to one-
third of the Company’s issued share capital;
and (ii) up to two-thirds of the Company’s
issued share capital in connection with a
rights issue. This authority will apply until
the conclusion of the 2023 AGM. A similar
authority will be sought from shareholders
at the 2023 AGM. The Company does not
currently have authority to purchase its
own shares, and no such authority is being
sought at the 2023 AGM.

Significant contracts –
change of control
The Company has various borrowing
arrangements, including a revolving
credit facility and Senior Secured notes.
These arrangements include customary
provisions that may require any outstanding
borrowings to be repaid and any
outstanding notes to be repurchased upon
a change of control of the Company. In
addition, the Cadbury licensing agreement
also includes a change of control provision,
which could result in the agreement being
terminated or renegotiated if the Company
were to undergo a change of control in
certain limited circumstances.

The Company’s executive and all-employee
share plans contain provisions, as a result
of which options and awards may vest and
become exercisable on a change of control
in accordance with the plan rules.

Articles of association
The Company’s Articles (which are available
on the Group’s website www.premierfoods.
co.uk) may only be amended by a special
resolution at a general meeting. Subject
to the provisions of the statutes, the
Company’s Articles, and any directions given
by special resolution, the directors may
exercise all the powers of the Company.

115

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWAdditional feedback mechanisms, via
the Board’s Remuneration and Audit
Committees, include:

• Understanding of remuneration

arrangements for the workforce across
the business;

• Updates on the management bonus
scheme and pay arrangements for
colleagues across the business; and

• Periodic reporting of issues raised via the
Company’s confidential whistleblowing
helpline and management’s response
to them.

Further information on how we have
engaged with employees during the
financial period can be found in the
following sections:

• Workforce Engagement NED: pages 74

and 75.

• Engaging with our stakeholders and

Section 172(1) statement: pages 79 to 81.

Colleague communication
We continue to place a high degree of
importance on communicating with
colleagues, at all levels of the organisation,
which is facilitated further by investment in
this area, with large digital news screens at
every site, our mobile-enabled intranet, a
weekly news round-up email and posters.

We also video stream our colleague briefing
sessions directly to all sites, in addition to
cascading it through local briefings. We
believe it is important to hear views from our
colleagues in order to understand how the
working environment can be improved. In our
manufacturing sites, we have constructive
relationships with our Trade Union colleagues,
while at head office, we run ‘Listening Groups’
and ‘Lunch and Learn’ events.

Other statutory information

CONTINUED

Substantial shareholdings
Information provided to the Company pursuant to the Financial Conduct Authority’s (FCA)
Disclosure and Transparency Rules (DTRs) is published on a Regulatory Information Service
and on the Company’s website. As at 18 May 2023, the Company has been notified of the
following interests of 3% or more in the Company:

Shareholder
Nissin Foods Holdings Co., Ltd.
JPMorgan Asset Management Holdings Inc.3
Kempen Capital Management N.V.

M&G Plc

1 Number of shares held at date of notification.
2 Percentage of share capital as at 1 April 2023.
3 Held in the form of shares and as a total return swap.

Powers of directors
The powers of the directors are set out
in the Company’s Articles of Association
and may be amended by way of a special
resolution of the Company.

Director appointments
The Board has the power to appoint one or
more additional directors. Under the Articles,
any such director holds office until the next
AGM when they are eligible for election.
Shareholders may appoint, reappoint or
remove directors by an ordinary resolution.
In addition, the appointment of Yuichiro Kogo
is subject to the terms of the Shareholder
Relationship Agreement (see Conflicts of
interest on page 76).

Directors’ and officers’
liability insurance
This insurance covers the directors and
officers against the costs of defending
themselves in civil proceedings taken
against them in their capacity as a director
or officer of the Company and in respect of
damages resulting from the unsuccessful
defence of any proceedings.

Access to external advice
Directors are allowed to take independent
professional advice in the course of their
duties. In addition, all directors have access
to the advice and services of the Company
Secretary. If any director were to have a
concern over any unresolved business issue
following professional advice, they are
entitled to require the Company Secretary to
minute that concern. Should they later resign
over a concern, non-executive directors are
asked to provide a written statement to the
Chair for circulation to the Board.

No. of ordinary
shares1
210,836,846
44,559,230
42,810,000

% of share
capital2
24.29
5.13
4.93

34,916,779

4.02

Political donations
The Company’s policy is not to make
political donations and no such donations
were made in the financial period.

Employment of people
with disabilities
It is our policy to give full and fair
consideration to applications for
employment received from people with
disabilities, having regard to their particular
aptitudes and abilities. Wherever possible,
we will continue the employment of, and
arrange appropriate training for, employees
who have become disabled during the
period of their employment. We provide
the same opportunities for training, career
development and promotion for people
with disabilities as for other colleagues.

Stakeholder engagement
Details of engagement with key stakeholders
is provided on pages 79 to 81.

Colleague engagement
The Board and its committees receive
regular updates on workforce matters,
which include:

• Updates on key issues raised at Voice

Forums, which have been established at
sites across the business;

• Site-based pay negotiations;

• Results of periodic employee engagement
exercises and action plans to address the
issues raised; and

• All employee share schemes.

116

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Modern Slavery
We are committed to tackling all forms of
hidden labour exploitation, including slavery
and human trafficking, and we ensure that
all new members of the Procurement team
receive specific training on modern slavery
and trafficking as part of their induction.
The training utilises both internal and
external training resource materials and is
tailored to raise awareness of the issues
around modern slavery in supply chains and
to empower team members to recognise
and respond to indicators of human rights
abuse. Our Modern Slavery Statement is
reviewed and approved by the Board on an
annual basis and is available to view on the
Group’s website.

Financial risk management
Details relating to financial risk management
in relation to the use of financial instruments
by the Group, can be found in note 19 of the
financial statements.

Going concern and
Viability Statement
The directors have a reasonable expectation
that the Company and Group have adequate
resources to continue in operational
existence for the next 12 months and,
therefore, continue to adopt the going
concern basis in preparing the consolidated
financial statements. Further information
on the basis of preparation is set out in note
2.1 on page 132. The Company’s Viability
Statement, where the directors confirm that
they have a reasonable expectation that the
Group will be able to continue in operation
and meet its liabilities as they fall due over
the five-year period to 1 April 2028, is set
out on pages 67 and 68.

Related parties
Details on related parties can be found in
note 27 on page 168.

Subsequent events
Details relating to subsequent events can be
found in note 30 on page 171.

Anti-corruption and anti-bribery
The Group has in place an Anti-Bribery and
Corruption Policy and a code of conduct for
third parties, which provide guidance for
complying with anti-corruption laws. These
are circulated to graded managers and those
who operate in commercial roles, together
with formal training and annual refreshers.
Training covers, amongst other things,
guidance on dealings with third parties,
facilitation payments, gifts and hospitality,
and charitable and political donations.
We do not tolerate any form of bribery
or corruption and expect all colleagues,
business partners, suppliers, contractors,
joint venture partners, customers, agents,
distributors and other representatives to act
in accordance with all laws and applicable
Group policies. The current Anti-Bribery and
Corruption Policy was approved by the Audit
Committee in March 2021 and a summary is
available on the Group’s website.

Code of conduct and
whistleblowing helpline
The Group is committed to ensuring that
everyone who comes into contact with the
business is treated with respect, and that
their health, safety and basic human rights
are protected and promoted. The Board has
approved a code of conduct, which sets out
the standards of behaviour all employees
are expected to follow, and provides useful
guidance to help colleagues when it comes to
doing the right thing. The code was introduced
in 2012 and is updated and reissued on a
periodic basis. A copy of the code is included
in the induction pack for new joiners and
is available on the Group’s intranet and
corporate website. The code is made up of 10
key elements, including: acting honestly and
complying with the law; competing fairly; food
safety; and treating people fairly.

We also have a confidential whistleblowing
call line to enable anyone who comes
into contact with our business (whether
colleagues, contractors, agency workers,
customers, suppliers or distributors), to raise
any concerns they have, which cannot be
dealt with through the normal channels.
Calls logged with the whistleblowing service
are followed up promptly by the appropriate
person within the business and the issues
raised, and management’s response, are
reviewed by the Audit Committee. The Audit
Committee also reviews the whistleblowing
service, annually, and arranges for it to be
refreshed and communicated to sites.

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Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOVERVIEWStatement of directors’ responsibilities

IN RESPECT OF THE FINANCIAL STATEMENTS

In the case of each director in office at the
date the directors’ report is approved:

• so far as the director is aware, there is
no relevant audit information of which
the Group’s and Company’s auditors are
unaware; and

• they have taken all the steps that they

ought to have taken as a director in order
to make themselves aware of any relevant
audit information and to establish that the
Group’s and Company’s auditors are aware
of that information.

Independent auditors
PricewaterhouseCoopers LLP (‘PwC’) has
indicated its willingness to be appointed
as auditors of the Company. Upon
recommendation of the Audit Committee,
the appointment of PwC and the setting of
its remuneration will be proposed at the
2023 AGM.

The directors’ report was approved by the
Board on 18 May 2023 and signed on its
behalf by:

Simon Rose
General Counsel and Company
Secretary

companysecretary@premierfoods.co.uk

The directors are responsible for preparing
the Annual Report for the 52 weeks ended
1 April 2023 and the financial statements
in accordance with applicable law and
regulation.

Company law requires the directors to
prepare financial statements for each
financial year. Under that law, the directors
have prepared the Group financial
statements in accordance with UK-adopted
international accounting standards and
the Company financial statements in
accordance with United Kingdom Generally
Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising
FRS 101 ‘Reduced Disclosure Framework’
and applicable law).

Under company law, directors must not
approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs of the Group
and Company and of the profit or loss of
the Group for that period. In preparing
the financial statements, the directors are
required to:

• select suitable accounting policies and

then apply them consistently;

• state whether applicable UK-adopted

international accounting standards have
been followed for the Group financial
statements and United Kingdom
Accounting Standards, comprising
FRS 101 have been followed for the
Company financial statements, subject
to any material departures disclosed and
explained in the financial statements;

• make judgements and accounting
estimates that are reasonable and
prudent; and

• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
and Company will continue in business.

The directors are responsible for
safeguarding the assets of the Group and
Company and hence for taking reasonable
steps for the prevention and detection of
fraud and other irregularities.

The directors are also responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group’s
and Company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the Group and Company
and enable them to ensure that the financial
statements and the Directors’ Remuneration
Report comply with the Companies Act 2006.

The directors are responsible for the
maintenance and integrity of the Company’s
website. Legislation in the United
Kingdom, governing the preparation and
dissemination of financial statements, may
differ from legislation in other jurisdictions.

Directors’ confirmations
The directors consider that the Annual
Report for the 52 weeks ended 1 April 2023
and accounts, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the Group’s and Company’s
position and performance, business model
and strategy.

Each of the directors, whose names and
functions are listed in the Board of directors
section, confirm that, to the best of their
knowledge:

• the Group financial statements, which

have been prepared in accordance with
UK-adopted international accounting
standards, give a true and fair view of the
assets, liabilities, financial position and
profit of the Group;

• the Company financial statements, which
have been prepared in accordance with
United Kingdom Accounting Standards,
comprising FRS 101, give a true and fair
view of the assets, liabilities and financial
position of the Company; and

• the strategic report includes a fair review
of the development and performance of
the business and the position of the Group
and Company, together with a description
of the principal risks and uncertainties that
it faces.

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Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Financial
Statements

IN THIS SECTION

Independent auditors’ report to the members
of Premier Foods plc
Consolidated financial statements
Notes to the consolidated financial statements
Company financial statements
Notes to the Company financial statements
Enriching Life Plan disclosure tables
Additional information

120
128
132
172
174
178
184

Premier Foods plc
www.premierfoods.co.uk

119

Independent auditors' report

TO THE MEMBERS OF PREMIER FOODS PLC

Report on the audit of the financial statements

Opinion
In our opinion:

• Premier Foods plc’s group financial statements and company

financial statements (the “financial statements”) give a true and
fair view of the state of the group’s and of the company’s affairs
as at 1 April 2023 and of the group’s profit and the group’s cash
flows for the 52 week period then ended;

•

the group financial statements have been properly prepared
in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions of the
Companies Act 2006;

the company financial statements have been properly prepared
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
including FRS 101 “Reduced Disclosure Framework”, and
applicable law); and

•

the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the
Annual Report for the 52 weeks ended 1 April 2023 (the “Annual
Report”), which comprise: the Consolidated and Company balance
sheets as at 1 April 2023; the Consolidated statement of profit
or loss, the Consolidated statement of comprehensive income,
the Consolidated and Company statements of changes in equity,
the Consolidated statement of cash flows for the period then
ended; and the notes to the financial statements, which include a
description of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit
Committee.

Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.

Independence
We remained independent of the group in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard,
as applicable to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.

To the best of our knowledge and belief, we declare that non-
audit services prohibited by the FRC’s Ethical Standard were not
provided.

Other than those disclosed in note 5.2 to the consolidated financial
statements, we have provided no non-audit services to the
company or its controlled undertakings in the period under audit.

Our audit approach
Overview
Audit scope
• Audit procedures provide coverage of 99% of revenue and 97%

of absolute profit before taxation.

• Audit procedures performed over 5 full scope components.

• Financially significant components were Premier Foods Group

Limited and Premier Foods Group Services Limited.

Key audit matters
• Valuation of pension liabilities and complex pension assets

(group)

• Accounting for commercial arrangements (group)

• Fair value accounting associated with the Spice Tailor

acquisition (group)

• Recoverability of investment in, and amounts owed by, group

undertakings (company)

Materiality
• Overall group materiality: £5,650,000 based on approximately

5% of profit before taxation).

• Overall company materiality: £3,000,000 based on 1% of total

assets.

• Performance materiality: £4,237,000 (group) and £2,250,000

(company).

The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements.

120

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Key audit matter

How our audit addressed the key audit matter

Valuation of pension liabilities and complex pension assets (group)

As set out in note 14, the group had £765.5m (2022: £944.9m)
of net retirement benefit assets as at 1 April 2023 in relation
to defined benefit pension schemes. These primarily represent
the RHM Schemes with a net asset position of £948.3m (2022:
net asset of £1,138.8m) and the Premier Schemes with a net
retirement benefit obligation of £182.8m (2022: net obligation of
£193.9m).

The group uses third party actuaries to calculate the present
value of the pension scheme obligations. The valuation of
these obligations is based on a number of assumptions and the
calculation is highly sensitive to small changes in the assumptions.
For instance, changes in inflation, mortality assumptions and the
discount rate can have a significant impact on the valuation of the
obligation recorded.

The pension scheme assets also contains level 3 and other
complex assets (complex Pooled Investment Vehicles where
assets are not traded on Recognised Investment Exchanges (RIE))
totalling £2,372.0m as at 1 April 2023, which are complex in
nature to value and therefore we deem there to be a risk with
respect to the valuation of these assets.

In order to audit the identified risks:

• We obtained and reviewed the external actuarial reports of

the RHM and Premier schemes which set out the calculations
and assumptions underpinning the period end pension
scheme obligation valuation.

• We held discussions with the external actuaries to understand
their approach to calculating the pension obligation. This
included understanding their assumptions setting process
and an explanation of the model they use to calculate the
obligation to satisfy ourselves that the approach they adopt is
reasonable for us to be able to place reliance on their report.

• We assessed the competency and objectivity of the

external actuaries to perform the period end calculations by
considering their technical expertise and independence from
the group.

• We used our own specialist actuarial team to evaluate the key
assumptions used in each of the schemes by comparing these
assumptions to our expectations for similar schemes as at the
year end.

• With respect to the level 3 and other more complex assets,
we tested values through a combination of the following
procedures: reviewed audited accounts of pooled investment
vehicles; reviewed internal control reports of the service
provider responsible for the valuation of the fund, including
obtaining bridging letters where the control report does
not cover the current financial period of Premier Foods plc;
obtained fund transactions close to the period end (where
available), and obtained third party confirmation from the
investment managers.

• We assessed the adequacy of the related disclosures within

the financial statements, including note 3.1 on the significant
accounting estimates involved in Employee benefits and
note 14.

We noted no material exceptions from the above audit
procedures.

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Independent auditors' report

TO THE MEMBERS OF PREMIER FOODS PLC | CONTINUED

Key audit matter

How our audit addressed the key audit matter

Accounting for commercial arrangements (group)

The group has various types of commercial arrangements in place
with customers, offering promotions and discounts.

The arrangements vary in nature and therefore there is the risk
that the arrangements are not appropriately accounted for which
would result in revenue being misstated as revenue is recognised
net of the outflows from these arrangements.

Some of the arrangements are subject to a higher degree of
estimation, for instance when it is dependent on the customer
achieving a growth target and the contract-period is not co-
terminus with the group’s financial period. This requires the
directors to recognise an estimate of the accrual related to in
period promotional activity which remains unsettled at the group’s
period end.

There is a risk related to uncertainty arising from estimating the
sales volumes attributable to each arrangement, or estimating the
final expected settlement, which could vary based on subsequent
commercial negotiations.

The unsettled liability from these arrangements as at 1 April 2023
was £67.5m (as at 2 April 2022: £75.1m) as set out in note 18.

In order to assess the identified risks we:

• Understood the different types of arrangements in place with
customers, including the nature of the agreements and the
level of estimation involved in accounting for each type of
arrangement.

• Understood and evaluated the processes and controls in
relation to the recognition of commercial arrangements,
including the approval process.

• Performed a lookback test on the prior period commercial

accruals balance compared to the actual amounts
subsequently settled.

• Audited the commercial arrangements recognised in the
period to supporting documentation such as contracts,
correspondence with customers, invoices and cash. We also
obtained and considered the reasonableness of the rationale
for releases, where applicable.

• Validated a sample of rebates settled one month post

period end to check if any related to FY23 but had not been
appropriately accrued in the period.

• Performed flux analyses over the commercial accrual balance
for i) one month post period end (comparing the balance at
30 April 2023 to the period end date) and ii) period on period
(comparing the balance at 1 April 2023 to the prior period
end date of 2 April 2022) with a view to corroborating the
completeness of the commercial arrangements recognised and
any significant variances that required investigation.

•

Issued external confirmations to a sample of customers
requesting confirmation of the commercial arrangements in
place at both the FY23 interim and period end dates.

• Performed customer store visits and checked online vendors

to identify products on promotion at the period end date, and
traced the promotions identified to the group’s period end
commercial arrangement records.

• We assessed the adequacy of the related disclosures within

the financial statements.

We noted no material exceptions from the above procedures

122

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023
Key audit matter

How our audit addressed the key audit matter

Fair value accounting associated with the Spice Tailor acquisition
(group)

As set out in note 28, the group completed the acquisition of the
Spice Tailor business on 31 August 2022 for an initial consideration
of £44.5m.

The valuation of assets acquired and liabilities assumed is complex
and requires significant judgement in applying forecasts and
assumptions made by management. The principal risk relates
to the estimates of the fair values of the identifiable assets and
liabilities assumed together with the deferred taxes on acquisition
in preparing the purchase price allocation.

Given the extent of the judgment in valuing these assets and
obligations, we believe that the fair value calculation carries
significant risk of material misstatement.

Management determined the fair values of the assets acquired
and liabilities assumed under IFRS 3 with its own external expert.

Recoverability of investment in, and amounts owed by, group
undertakings (company)

As disclosed in notes 4 and 5 of the company’s financial
statements, the company held an investment in group
undertakings of £1,117.8m (2022: £1,114.8m) and amounts owed
by group undertakings of £62.0m (2022: £27.7m) at 1 April 2023.

The assessment of the recoverability of these assets required the
application of management judgement in assessing whether the
carrying value of each investment and amounts owed by group
undertakings are recoverable.

As the amounts are material, changes to the judgements and
estimation made by management could have a material impact on
the company’s financial statements and hence we consider this to
be a key audit matter.

Our procedures included the following:

• Assessing the business processes and controls related to the

purchase price allocation.

• Reviewing the purchase agreement with a focus on

unusual terms and conditions and more complex forms of
consideration.

• Comparing the identified assets and liabilities with other
sources of information, such as board presentations, that
might suggest omitted items.

• Obtaining the report prepared by management’s expert used

to value certain of the acquired assets and utilising our own
specialists to assess the valuation techniques, assumptions
and source data, used to determine these fair values.

• Evaluating the allocation of the purchase price to the relative

fair values of the assets and liabilities acquired.

• We assessed the adequacy of the related disclosures within

the financial statements.

Based on the procedures performed, we noted no material
exceptions from our work.

Our procedures included the following:

• Assessing the recoverable value by reference to the net assets
of the underlying subsidiaries and amounts owed by group
undertakings with reference to the directors' intentions for the
settlement of group-wide intercompany balances.

• Assessing the impact of climate change included in

management’s cashflow forecast.

• Comparing the market capitalisation of the group to the total

of the company’s non-current and current assets.

• Verifying that the recoverable values of the investment were
consistent with the recoverable value of the CGUs tested for
goodwill impairment purposes, leveraging the audit work
undertaken as part of the group audit.

Based on the procedures performed, we noted no material issues
from our work.

How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as
a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in which
they operate.

As set out in note 4 ‘Segmental analysis’, the group has two reportable segments: ‘Grocery’ (which includes the grocery and international
divisions) and ‘Sweet Treats’. The group’s financial statements are a consolidation of reporting units, being holding companies, intermediate
holding companies and operating companies mostly in the United Kingdom. Two reporting units, being Premier Foods Group Limited and
Premier Foods Group Services Limited, account for a significant portion of the group’s results. We accordingly focused our work on these
two reporting units, which were subject to audits of their complete financial information. In addition, to increase our coverage of the
group’s balance sheet and certain profit or loss financial statement line items we performed full scope audit procedures at an additional
three reporting units all located in the UK. These components accounted for 99% of the group’s revenue and 97% of the group’s absolute
profit before taxation.

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Independent auditors' report

TO THE MEMBERS OF PREMIER FOODS PLC | CONTINUED

The impact of climate risk on our audit
As part of our audit we made enquiries of management to
understand the process management has adopted to assess
the extent of the potential impact of climate risk on the group’s
financial statements and support the disclosures made within
the Taskforce on Climate-related Financial Disclosures (TCFD). In
addition to enquiries with management, we also understood the
governance processes in place to assess climate risk. We challenged
the completeness of management’s climate risk assessment by
comparing this to assessments performed by other groups for
completeness and reading the group’s website/communications
to ensure details of climate related impacts communicated to
shareholders have been included. Management considers that
climate risk does not give rise to a potential material financial
statement impact. We considered impairment of non-current
assets, especially impairment of goodwill and intangible assets, as
the area to potentially be materially impacted by climate risk and
consequently we focused our audit work in this area. To respond to
the audit risks identified in this area we tailored our audit approach
to address these, in particular, we challenged management on
how the impact of climate commitments made by the group

would impact the assumptions within the discounted cash flows
prepared by management that are used in the group’s impairment
analysis. We also considered the consistency of the disclosures in
relation to climate change (including the disclosures in the TCFD
section) within the Annual Report with the financial statements
and our knowledge obtained from our audit. Our procedures did
not identify any material impact in the context of our audit of the
financial statements as a whole, or our key audit matters for the
period ended 1 April 2023.

Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial statement line
items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the financial statements as
a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Financial statements - group

Financial statements - company

Overall materiality

£5,650,000.

£3,000,000.

How we determined it

approximately 5% of profit before taxation)

1% of total assets

Rationale for
benchmark applied

We believe that profit before taxation is a key
metric for investors and is used by the Board in
measuring the Group’s financial performance.

We believe that total assets is the primary measure used by the
shareholders in assessing the performance of the company, and is a
generally accepted benchmark. The value is capped for the purpose of
the Group audit with reference to Group materiality.

For each component in the scope of our group audit, we allocated
a materiality that is less than our overall group materiality. The
range of materiality allocated across components was between
£3,000,000 to 5,000,000. Certain components were audited to a
local statutory audit materiality that was also less than our overall
group materiality.

We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 75% of overall
materiality, amounting to £4,237,000 for the group financial
statements and £2,250,000 for the company financial statements.

In determining the performance materiality, we considered a
number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and
concluded that an amount at the upper end of our normal range
was appropriate.

We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above £282,000 (group
audit) and £150,000 (company audit) as well as misstatements
below those amounts that, in our view, warranted reporting for
qualitative reasons.

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Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the
company’s ability to continue to adopt the going concern basis of
accounting included:

• Obtaining management’s Board-approved strategic plan for the
five year period ended 31 March 2028. We held discussions
with management to understand the budgeting process and the
key assumptions made in the forecasting processes;

• Performed a comparison of the cash flow forecasts used in the
going concern assessment to those in the strategic plan and,
where applicable, compared these forecasts for consistency to
those used elsewhere in the business, including for impairment
assessments;

• Assessing whether the stress testing performed by

management appropriately considered the principal risks facing
the business, and were adequate;

• Using our understanding of the business and our knowledge

from the audit we calculated sensitivities to apply to
management’s cash flow forecasts, these procedures confirmed
significant headroom in management’s forecasts when
performing severe but plausible sensitivities;

• Evaluating the feasibility of management’s mitigating actions in

response to the severe stress testing scenarios; and

• Assessing the adequacy of disclosures in the “Basis for

preparation of financial statements on a going concern basis”
include in note 2.1 and found these appropriately reflect our
understanding of the process undertaken and the conclusion
reached.

Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s and the company’s ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.

In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.

However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the group’s and
the company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied
the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement in
the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.

Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other
information, which includes reporting based on the Task Force on
Climate-related Financial Disclosures (TCFD) recommendations.
Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or,
except to the extent otherwise explicitly stated in this report, any
form of assurance thereon.

In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in
the audit, or otherwise appears to be materially misstated.
If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude
whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required
to report that fact. We have nothing to report based on these
responsibilities.

With respect to the Strategic report and Directors’ report, we also
considered whether the disclosures required by the UK Companies
Act 2006 have been included.

Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions and
matters as described below.

Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the
audit, the information given in the Strategic report and Directors’
report for the period ended 1 April 2023 is consistent with the
financial statements and has been prepared in accordance with
applicable legal requirements.

In light of the knowledge and understanding of the group and
company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic report and Directors’ report.

Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.

Corporate governance statement
The Listing Rules require us to review the directors’ statements
in relation to going concern, longer-term viability and that part
of the corporate governance statement relating to the company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review. Our additional responsibilities
with respect to the corporate governance statement as other
information are described in the Reporting on other information
section of this report.

125

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCEIndependent auditors' report

TO THE MEMBERS OF PREMIER FOODS PLC | CONTINUED

Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:

We have nothing to report in respect of our responsibility to
report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a departure
from a relevant provision of the Code specified under the Listing
Rules for review by the auditors.

• The directors’ confirmation that they have carried out a robust

assessment of the emerging and principal risks;

• The disclosures in the Annual Report that describe those
principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being
managed or mitigated;

• The directors’ statement in the financial statements about
whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their
identification of any material uncertainties to the group’s and
company’s ability to continue to do so over a period of at
least twelve months from the date of approval of the financial
statements;

• The directors’ explanation as to their assessment of the group’s
and company’s prospects, the period this assessment covers
and why the period is appropriate; and

• The directors’ statement as to whether they have a reasonable
expectation that the company will be able to continue in
operation and meet its liabilities as they fall due over the period
of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-
term viability of the group and company was substantially less in
scope than an audit and only consisted of making inquiries and
considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant
provisions of the UK Corporate Governance Code; and considering
whether the statement is consistent with the financial statements
and our knowledge and understanding of the group and company
and their environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit,
we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the
financial statements and our knowledge obtained during the audit:

• The directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the directors to assess
the group’s and company’s position, performance, business
model and strategy;

• The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems; and

• The section of the Annual Report describing the work of the

Audit Committee.

Responsibilities for the financial statements
and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’
responsibilities, the directors are responsible for the preparation
of the financial statements in accordance with the applicable
framework and for being satisfied that they give a true and fair
view. The directors are also responsible for such internal control as
they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due
to fraud or error.

In preparing the financial statements, the directors are responsible
for assessing the group’s and the company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the company or to
cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.

Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud,
is detailed below.

Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with laws
and regulations related to breaches of environmental, health
and safety and competition regulations, and we considered the
extent to which non-compliance might have a material effect
on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements
such as the Companies Act 2006 and UK corporation tax legislation.
We evaluated management’s incentives and opportunities for
fraudulent manipulation of the financial statements (including the

126

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023risk of override of controls), and determined that the principal
risks were related to posting inappropriate journal entries to
materially misstate the financial statements and management
bias in accounting estimates. Audit procedures performed by the
engagement team included:

Other required reporting

Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if,
in our opinion:

• Discussions with management at multiple levels across

• we have not obtained all the information and explanations we

require for our audit; or

• adequate accounting records have not been kept by the

company, or returns adequate for our audit have not been
received from branches not visited by us; or

•

certain disclosures of directors’ remuneration specified by law
are not made; or

the company financial statements and the part of the Directors’
remuneration report to be audited are not in agreement with
the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment
Following the recommendation of the Audit Committee, we were
appointed by the directors on 23 August 2022 to audit the financial
statements for the period ended 1 April 2023 and subsequent
financial periods. This is therefore our first period of uninterrupted
engagement.

Other matter
As required by the Financial Conduct Authority Disclosure Guidance
and Transparency Rule 4.1.14R, these financial statements form
part of the ESEF-prepared annual financial report filed on the
National Storage Mechanism of the Financial Conduct Authority
in accordance with the ESEF Regulatory Technical Standard (‘ESEF
RTS’). This auditors’ report provides no assurance over whether
the annual financial report has been prepared using the single
electronic format specified in the ESEF RTS.

Richard Porter (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
18 May 2023

the business, internal audit and the Group’s legal counsel
throughout the year, as well as at year end. These discussions
have included consideration of known or suspected instances of
non-compliance with laws and regulations and fraud;

• Evaluation of management’s controls designed to prevent and

detect irregularities;

• Challenging assumptions and judgements made by

management in their significant accounting estimates, in
particular in relation to the fair value accounting associated
with the Spice Tailor acquisition, the completeness and
accuracy of the accounting for commercial arrangements, the
valuation of defined benefit scheme obligations and assets and
the valuation of the investment in subsidiaries;

•

Identifying and testing journal entries, in particular any journal
entries posted with unusual account combinations (for example
credit to revenue with a debit entry to an unexpected account)
or journals posted by senior management; and

•

Incorporating elements of unpredictability into the audit
procedures performed.

There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related
to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery
or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited
number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing
based on their size or risk characteristics. In other cases, we will
use audit sampling to enable us to draw a conclusion about the
population from which the sample is selected.

A further description of our responsibilities for the audit of the
financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditors’ report.

Use of this report
This report, including the opinions, has been prepared for and only
for the company’s members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose.
We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.

127

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCE
Consolidated statement of profit or loss

Revenue
Cost of sales
Gross profit
Selling, marketing and distribution costs
Administrative costs
Other income
Operating profit
Finance cost
Finance income
Profit before taxation
Taxation
Profit for the period attributable to owners of the parent

Earnings per share (pence)
Basic
Diluted

Consolidated statement of
comprehensive income

Profit for the period

Other comprehensive income, net of tax
Items that will never be reclassified to profit or loss
Remeasurements of defined benefit schemes
Deferred tax credit/(charge)
Current tax credit
Items that are or may be reclassified subsequently to profit or loss
Exchange differences on translation
Other comprehensive income, net of tax
Total comprehensive income attributable to owners of the parent

The notes on pages 132 to 171 form an integral part of the consolidated financial statements.

Note

6
4, 5
8
8

10
10

Note

14
9
9

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

1,006.4
(648.2)
358.2
(142.0)
(87.8)
3.8
132.2
(21.7)
1.9
112.4
(20.8)
91.6

900.5
(573.4)
327.1
(133.4)
(62.6)
–
131.1
(29.0)
0.5
102.6
(25.1)
77.5

10.6
10.4

9.0
8.8

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

91.6

77.5

(245.6)
52.7
7.2

0.6
(185.1)
(93.5)

357.3
(114.2)
6.4

(0.4)
249.1
326.6

128

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Consolidated balance sheet

ASSETS:

Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Deferred tax assets
Net retirement benefit assets

Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Derivative financial instruments

Total assets
LIABILITIES:

Current liabilities
Trade and other payables
Financial liabilities
– short-term borrowings
– derivative financial instruments
Lease liabilities
Provisions for liabilities and charges

Non-current liabilities
Long-term borrowings
Lease liabilities
Net retirement benefit obligations
Provisions for liabilities and charges
Deferred tax liabilities
Other liabilities

Total liabilities
Net assets
EQUITY:

Capital and reserves
Share capital
Share premium
Merger reserve
Other reserves
Retained earnings

Total equity

As at
1 April 2023
£m

As at
2 April 2022
£m

Note

11
12
13
9
14

15
16
17
19

20
19
20
21

20
20
14
21
9
22

23
23
23
23
23

185.9
680.3
294.4
22.4
960.1
2,143.1

93.7
103.9
64.4
0.8
262.8
2,405.9

190.9
646.0
293.5
23.1
1,148.7
2,302.2

78.1
96.5
54.3
2.4
231.3
2,533.5

(255.4)

(254.0)

(1.0)
(0.5)
(2.1)
(13.3)
(272.3)

(324.4)
(11.2)
(194.6)
(6.6)
(177.9)
(12.9)
(727.6)
(999.9)
1,406.0

86.8
2.5
351.7
(9.3)
974.3
1,406.0

–
(0.3)
(2.1)
(2.3)
(258.7)

(323.2)
(14.0)
(203.8)
(8.3)
(212.9)
(5.7)
(767.9)
(1,026.6)
1,506.9

86.3
1.5
351.7
(9.3)
1,076.7
1,506.9

The notes on pages 132 to 171 form an integral part of the consolidated financial statements.

The financial statements on pages 128 to 171 were approved by the Board of directors on 18 May 2023 and signed on its behalf by:

Alex Whitehouse
Chief Executive Officer

Duncan Leggett
Chief Financial Officer

129

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCE
Consolidated statement of cash flows

Cash generated from operations
Interest paid
Interest received
Taxation paid
Cash generated from operating activities

Acquisition of subsidiaries, net of cash acquired
Purchases of property, plant and equipment
Purchases of intangible assets
Cash used in investing activities

Repayment of borrowings
Proceeds from borrowings
Principal element of lease payments
Financing fees1
Early redemption fee1
Dividends paid
Purchase of shares to satisfy share awards
Proceeds from share issue
Cash used in financing activities

Net increase in cash and cash equivalents
Cash, cash equivalents and bank overdrafts at beginning of period
Cash, cash equivalents and bank overdrafts at end of period2

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

108.3
(20.4)
0.8
(1.5)
87.2

(43.8)
(15.5)
(4.5)
(63.8)

–
–
(2.3)
(0.7)
–
(10.3)
(2.5)
1.5
(14.3)

9.1
54.3
63.4

110.9
(21.2)
0.4
–
90.1

–
(19.5)
(3.7)
(23.2)

(320.0)
330.0
(3.3)
(8.5)
(4.7)
(8.5)
(0.4)
1.7
(13.7)

53.2
1.1
54.3

Note

1 Financing fees in the prior period relate to payments made as part of the refinancing of the Group’s debt in June 2021. See note 20 for further details.

2 Cash and cash equivalents of £63.4m (2021/22: £54.3m) includes bank overdraft of £1.0m (2021/22: £nil) and cash and bank deposits of £64.4m (2021/22: £54.3m). See notes

17 and 20 for more details.

The notes on pages 132 to 171 form an integral part of the consolidated financial statements.

130

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Consolidated statement of changes in equity

At 4 April 2021
Profit for the period
Remeasurements of defined benefit schemes
Deferred tax charge
Current tax credit
Exchange differences on translation
Other comprehensive income
Total comprehensive income
Shares issued
Share-based payments
Purchase of shares to satisfy share awards
Deferred tax movements on share-based
payments
Dividends
At 2 April 2022

At 3 April 2022
Profit for the period
Remeasurements of defined benefit schemes
Deferred tax charge
Current tax credit
Exchange differences on translation
Other comprehensive income
Total comprehensive income
Shares issued
Share-based payments
Purchase of shares to satisfy share awards
Deferred tax movements on share-based
payments
Dividends
At 1 April 2023

Note

14
9
9

23
23
23

9
24

14
9
9

23
23
23

9
24

Share
capital
£m
85.5
–
–
–
–
–
–
–
0.8
–
–

–
–
86.3

86.3
–
–
–
–
–
–
–
0.5
–
–

–
–
86.8

Share
premium
£m
0.6
–
–
–
–
–
–
–
0.9
–
–

–
–
1.5

1.5
–
–
–
–
–
–
–
1.0
–
–

–
–
2.5

Merger
reserve
£m
351.7
–
–
–
–
–
–
–
–
–
–

–
–
351.7

351.7
–
–
–
–
–
–
–
–
–
–

–
–
351.7

Other
reserves
£m
(9.3)
–
–
–
–
–
–
–
–
–
–

–
–
(9.3)

(9.3)
–
–
–
–
–
–
–
–
–
–

–
–
(9.3)

Retained
earnings1
£m
755.1
77.5
357.3
(114.2)
6.4
(0.4)
249.1
326.6
–
3.4
(0.4)

0.5
(8.5)
1,076.7

1,076.7
91.6
(245.6)
52.7
7.2
0.6
(185.1)
(93.5)
–
4.6
(2.5)

(0.7)
(10.3)
974.3

Total
equity
£m
1,183.6
77.5
357.3
(114.2)
6.4
(0.4)
249.1
326.6
1.7
3.4
(0.4)

0.5
(8.5)
1,506.9

1,506.9
91.6
(245.6)
52.7
7.2
0.6
(185.1)
(93.5)
1.5
4.6
(2.5)

(0.7)
(10.3)
1,406.0

Included in Retained earnings at 1 April 2023 is £3.4m in relation to cumulative translation losses (2020/21: £3.3m loss, 2021/22: £3.7m loss).

The notes on pages 132 to 171 form an integral part of the consolidated financial statements.

131

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

1. General information
Premier Foods plc (the ‘Company’) is a public limited company incorporated in the United Kingdom and domiciled in England, registered
number 05160050, with its registered address at Premier House, Centrium Business Park, Griffiths Way, St Albans, Hertfordshire AL1 2RE.
The principal activity of the Company and its subsidiaries (the ‘Group’) is the manufacture and distribution of branded and own label food
products. Copies of the annual report and accounts are available on our website: www.premierfoods.co.uk/investors/results-centre.

These Group consolidated financial statements were authorised for issue by the Board of directors on 18 May 2023.

2. Accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise stated.

2.1 Basis of preparation
These Group financial statements were prepared in accordance with UK-adopted international accounting standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting under those standards. All amounts are presented to the
nearest £0.1m, unless otherwise indicated. They are prepared on a going concern basis and under the historical cost basis, except for
certain financial instruments and pension assets that have been measured at fair value.

The statutory accounting period is the 52 weeks from 3 April 2022 to 1 April 2023 and comparative results are for the 52 weeks from 4 April
2021 to 2 April 2022. All references to the ‘period’, unless otherwise stated, are for the 52 weeks ended 1 April 2023 and the comparative
period, 52 weeks ended 2 April 2022.

The preparation of financial statements in conformity with UK-adopted IFRS requires the use of certain significant accounting estimates. It
also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are
disclosed in note 3.

The following accounting standards and interpretations, issued by the International Accounting Standards Board (‘IASB’), effective for
periods on or after 1 January 2022, have been endorsed:

International Financial Reporting Standards

Amendments to IFRS 3
Amendments to IAS 16
Amendments to IAS 37

Business Combinations
Property, Plant and Equipment
Provisions, Contingent Liabilities and Contingent Assets

The following standards and amendments to published standards, effective for periods on or after 1 January 2023, have been endorsed:

International Financial Reporting Standards

Amendments to IAS 1
Amendments to IAS 8
Amendments to IAS 12
IFRS 17

Presentation of Financial Statements
Accounting policies, Changes in Accounting Estimates and Errors
Income Taxes
Insurance Contracts

The Group has considered the new or revised standards above and concluded that either they are not relevant to the Group or would not
have a material impact on the financial statements of the Group.

Basis for preparation of financial statements on a going concern basis
The Group’s revolving credit facility includes net debt/EBITDA and EBITDA/interest covenants as detailed in note 20. In the event these
covenants are not met then the Group would be in breach of its financing agreement and, as would be the case in any covenant breach,
the banking syndicate could withdraw funding to the Group. The Group was compliant with its covenant tests as at 1 October 2022 and 1
April 2023.

Having undertaken a robust assessment of the Group’s forecasts with specific consideration to the trading performance of the Group,
cashflows and covenant compliance, the Directors have a reasonable expectation that the Group is able to operate within the level of its
current facilities, meet the required covenant tests and has adequate resources to continue in operational existence for at least 12 months
from the date of approval of these financial statements. The Group therefore continues to adopt the going concern basis in preparing its
financial information for the reasons set out below:

At 1 April 2023 the Group had total assets less current liabilities of £2,133.6m, net current liabilities of £9.5m and net assets of £1,406.0m.
Liquidity as at that date was £245.4m, made up of cash and cash equivalents, and undrawn committed credit facilities of £175m expiring
between May 2025 and 2026. The covenants linked to the facilities are shown in note 20 of the financial statements. At the time of the
approval of this report, the cash and liquidity position of the group has not changed significantly.

132

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023The directors have rigorously reviewed the current global political and economic uncertainty driven by the conflict in Ukraine and the
inflationary pressures across the industry, and have modelled a severe but plausible downside case impacting future financial performance,
cash flows and covenant compliance, that cover a period of at least 12 months from the date of approval of the financial statements. The
downside case represents severe but plausible assumptions related primarily to the impact of inflation during the review period. The
directors have also considered the impact of the outbreak of an infectious disease, climate change, cyber-attacks and changes in consumer
preferences in the downside cases modelled and have assumed all scenarios within the downside cases impact during the periods
reviewed.

Whilst the downside scenario is deemed severe but plausible, it is considered by the directors to be a robust stress test of going concern,
having an adverse impact on revenue, margin, profit and cash flow. Should circumstances mean there is further downside, whilst not
deemed plausible, the directors, in response have identified mitigating actions within their control, that would reduce costs, optimising
cashflow and liquidity. This includes reducing capital expenditure, reducing marketing spend and delaying or cancelling discretionary spend.
The directors have assumed no significant structural changes to the business will be needed in any of the scenarios modelled. None of the
scenarios modelled are sufficiently material to prevent the Group from continuing as a going concern.

The Directors, after reviewing financial forecasts and financing arrangements, have a reasonable expectation that the Group has adequate
resources to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements.
Accordingly, the Directors are satisfied that it is appropriate to continue to adopt the going concern basis (in accordance with the guidance
‘Guidance on Risk Management, Internal Control and Related Financial and Business Reporting’ issued by the FRC) in preparing its
consolidated financial statements.

Climate change
The Group has considered the impact of both physical and transitional climate change risks on the financial statements of the Group. The
Group does not consider there to be a material impact on the valuation of the Group’s assets or liabilities, including useful economic life of
property, plant and equipment, or on any significant accounting estimates or judgements. See note 14 for further details on how the trustee
of the Group’s pension scheme plans to integrate climate change considerations into their investment strategy. The Group will continue to
monitor the impact on valuations of assets and liabilities as government policy evolves.

The impact of climate change has been considered in the projected cash flows used for impairment testing where the material risks
identified in the TCFD statement, see page 38, have been modelled in the severe but plausible scenario for going concern and viability.

2.2 Basis of consolidation
(i) Subsidiaries
The consolidated financial statements include the financial statements of Premier Foods plc and entities controlled by the Company (its
subsidiaries). Control is achieved where the Company is exposed to or has rights to variable returns from involvement with an investee and
has the ability to affect those returns through its power over the investee.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

2.3 Revenue
Revenue comprises the invoiced value for the sale of goods net of sales rebates, discounts, value added tax and other taxes directly
attributable to revenue and after eliminating sales within the Group. Revenue is recognised when the Group transfers control of products
over to the customer. Transaction price per case is pre agreed per the price list with any discount related to an individual customer-run
promotional agreed in advance. Long-term discounts and rebates are part of a commercial arrangement and the Group uses actual and
forecast sales to estimate the level of discount or rebate. The Group uses the ‘most likely amount’ method to estimate the value of the
variable consideration. Revenue is recognised on the following basis:

(i) Sale of goods
Sales of goods are recognised as revenue when a customer gains control of the goods, which typically coincides with the time when the
merchandise is delivered to customers and title passes.

(ii) Sales rebates and discounts
Sales related discounts comprise:

•

Long-term discounts and rebates, which are sales incentives to customers to encourage them to purchase increased volumes and are
related to total volumes purchased and sales growth.

• Short-term promotional discounts, which are directly related to promotions run by customers.

Sales rebates and discount accruals are treated as a reduction in the transaction price and are established at the time of sale based on
management’s best estimate of the amounts necessary to meet claims by the Group’s customers in respect of these rebates and discounts
and are reviewed for appropriateness at each reporting date. Accruals are made for each individual promotion or rebate arrangement and
are based on the type and length of promotion and nature of customer agreement. At the time an accrual is made the nature and timing of
the promotion is typically known. Accumulated experience is used to estimate and provide for rebates and discounts and revenue is only
recognised to the extent that it is highly probable that a significant reversal will not occur.

133

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

2. Accounting policies CONTINUED
(iii) Commercial income
Commercial income received from suppliers through rebates and discounts is recognised within cost of sales over the period(s) to which
the underlying contract or agreement relates. Accrued income is recognised for rebates on contracts covering the current period, for which
no cash was received at the balance sheet date. Deferred income is recognised for rebates that were received from suppliers at the balance
sheet date but relate to contracts covering future periods.

2.4 Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker
(‘CODM’). The CODM is responsible for allocating resources and assessing performance of the operating segments. See note 4 for further
details.

2.5 Foreign currency translation
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated
to the functional currency at the foreign exchange rate ruling at that date.

The results of overseas subsidiaries with functional currencies other than in sterling are translated into sterling at the closing rate of
exchange ruling in the period. The balance sheets of overseas subsidiaries are translated into sterling at the closing rate. Exchange
differences arising from retranslation at the period end exchange rates of the net investment in foreign subsidiaries are recorded as a
separate component of equity in reserves. All other exchange gains or losses are recorded in the statement of profit or loss.

2.6 Dividends
Dividend distributions to shareholders are recognised as a liability in the Group’s financial statements in the period in which the dividends
are approved by the shareholders, and for interim dividends in the period in which they are paid.

2.7 Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Cash and cash equivalents and bank overdrafts are offset where there
is a legally enforceable right to offset the recognised amounts and the Group intends to settle on a net basis.

Bank overdrafts which are not offset and that are repayable on demand and form an integral part of the Company’s cash management are
included as a component of cash and cash equivalents for the purpose only of the cash flow statement.

2.8 Property, plant and equipment (‘PPE’)
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.

PPE is initially recorded at cost. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to
its working condition for its intended use. Subsequent expenditure is added to the carrying value of the asset when it is probable that
incremental future economic benefits will transfer to the Group. All other subsequent expenditure is expensed in the period it is incurred.

Differences between the cost of each item of PPE and its estimated residual value are written off over the estimated useful life of the asset
using the straight-line method. Reviews of the estimated remaining useful lives and residual values of individual productive assets are
performed annually, taking account of commercial and technological obsolescence as well as normal wear and tear. Freehold land is not
depreciated. The useful economic lives of owned assets range from 15 to 50 years for buildings, 5 to 30 years for plant and equipment and
10 years for vehicles.

All items of PPE are reviewed for impairment when there are indications that the carrying value may not be fully recoverable.

Assets under construction represent the amount of expenditure recognised in the course of an asset’s construction. Directly attributable
costs that are capitalised as part of PPE include employee costs and an appropriate portion of relevant overheads. Depreciation of an
asset is recognised from the time it is available for use. The difference between the carrying value of disposed assets and the net disposal
proceeds is recognised in profit or loss.

2.9 Intangible assets
Goodwill
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is
tested annually for impairment.

In addition to goodwill, the Group recognises the following intangible assets:

Acquired intangible assets
Acquired brands and licences that are controlled through custody or legal rights and that could be sold separately from the rest of the
business are capitalised, where fair value can be reliably measured. All these assets are considered to have finite lives and are amortised on
a straight-line basis over their estimated useful economic lives that range from 15 to 40 years for brands and 10 years for licences.

134

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Software
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the
Group are recognised as intangible assets when the project or process is technically and commercially feasible. Directly attributable costs
that are capitalised as part of the software product include the software development employee costs and an appropriate portion of
relevant overheads.

Software development costs are amortised over their estimated useful lives on a straight-line basis over a range of 3 to 10 years.

The useful economic lives of intangible assets are determined based on a review of a combination of factors including the asset ownership
rights acquired and the nature of the overall product life cycle. Reviews of the estimated remaining useful lives and residual values of
individual intangible assets are performed annually.

Cloud computing arrangements
Licences to use cloud based software are only capitalised if the Group has both the contractual right to take possession of the software
without significant penalty and the ability to run the software independently from the original supplier. All other cloud computing
arrangements are treated as service contracts and charged to the statement of profit or loss over the term of the contract.

Costs to configure or customise software under a cloud computing arrangement are charged to the statement of profit or loss alongside the
related service contract, unless they create a separately identifiable resource controlled by the Group, in which case they are capitalised.

Research
Expenditure on research activities is charged to the statement of profit or loss in the period in which it is incurred.

2.10 Impairment
The carrying values of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at least annually
to determine whether there is an indication of impairment. For goodwill and other intangible assets with indefinite useful lives, the
recoverable amount is estimated each year at the same time. Assets that are subject to amortisation are assessed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. Non-financial assets, other than goodwill,
that have suffered an impairment loss are reviewed for possible reversal of the impairment at each reporting date.

Where an indication of impairment exists, the recoverable amount is estimated based on the greater of its value in use and its fair value
less costs to sell. In assessing the fair value less costs to sell, the market approach is often used to derive market multiples from a set of
comparative assets.

The Group reviews its identified CGUs for the purposes of testing goodwill on an annual basis, taking into consideration whether assets
generate independent cash inflows. The recoverable amounts of CGUs are determined based on the higher of fair value less costs of
disposal and value in use calculations. These calculations require the use of estimates.

Impairment losses are recognised in the statement of profit or loss in the period in which they occur.

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generate cash inflows from continuing use that are largely independent of the cash flows of other assets or groups of assets.

2.11 Finance cost and income
Finance cost
Borrowing costs are accounted for on an accruals basis in the statement of profit or loss using the effective interest method.

Finance income
Finance income is recognised on a time proportion basis, taking into account the principal amounts outstanding and the interest rates
applicable, taking into consideration the interest element of derivatives.

2.12 Leases
Lease recognition
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

For leases of properties in which the Group is a lessee, it has applied the practical expedient permitted by IFRS 16 and will account for each
lease component and any associated non-lease components as a single lease component.

Right of use assets
The Group recognises right of use assets at the commencement date of the lease. Right of use assets are measured at cost, less
accumulated depreciation and impairment losses and adjusted for any re-measurement of lease liabilities. The cost of right of use assets
includes the amount of lease liabilities recognised, adjusted for any lease payments made at or before the commencement date, less any
lease incentives received. Right of use assets are depreciated over the shorter of the asset’s useful life or the lease term on a straight-
line basis. Right of use assets are subject to and reviewed regularly for impairment. Depreciation on right of use assets is predominantly
recognised in cost of sales and administration costs in the consolidated statement of profit and loss.

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Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

2. Accounting policies CONTINUED
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of the lease payments to
be made over the lease term. Lease payments include fixed and variable lease payments that depend on an index or rate less any lease
incentives receivable. Any variable lease payments that do not depend on an index or rate are recognised as an expense in the period in
which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date if the
interest rate implicit in the lease is not readily determinable. Generally, the Group uses its incremental borrowing rate as the discount rate.

After the commencement date, the lease liability is increased to reflect the accretion of interest and reduced for lease payments made.
In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term or a change in the
fixed lease payments. Interest charges are included in finance costs in the consolidated statement of profit and loss and included in interest
paid within cash flows from operating activities. Payments for the principal element of lease liabilities are presented within cash flows from
financing activities.

Short-term leases and leases of low-value items
The Group has elected not to recognise right of use assets and lease liabilities for short-term leases of machinery and equipment that have
a lease term of less than 12 months and leases of low-value assets. Lease payments relating to short-term leases and leases of low-value
assets are recognised as an expense on a straight-line basis over the lease term.

2.13 Inventories
Inventories are stated at the lower of cost and net realisable value. Where appropriate, cost includes production and other attributable
overhead expenses as described in IAS 2 Inventories. Cost is calculated on a first-in, first-out basis by reference to the invoiced value of
supplies and attributable costs of bringing the inventory to its present location and condition. Net realisable value is the estimated selling
price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

All inventories are reduced to net realisable value where this is lower than cost.

A provision is made for slow moving, obsolete and defective inventory where appropriate.

2.14 Taxation
Income tax on the profit or loss for the period comprises current and deferred tax.

Current tax
Income tax is recognised in the statement of profit or loss except to the extent that it relates to items recognised directly in other
comprehensive income (‘OCI’) in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the
period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous
periods.

Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred taxation is not provided on the initial
recognition of an asset or liability in a transaction, other than in a business combination, if at the time of the transaction there is no effect
on either accounting or taxable profit or loss.

Deferred tax is measured at the tax rates that are expected to apply in the periods in which the asset or liability is settled based on tax rates
(and tax laws) that have been enacted or substantively enacted as at the balance sheet date.

The measurement of deferred tax assets and liabilities reflect the directors’ intention regarding the manner of recovery of an asset or
settlement of a liability.

For the purpose of recognising deferred tax on the pension scheme surplus, withholding tax (at 35%) would apply for any surplus being
refunded to the Group at the end of the life of the scheme. In the spring budget of 2021, the corporation tax rate increased from the
current 19% to 25% starting April 2023. Corporation tax at 25% (19% until March 2023) would apply for any surplus expected to unwind
over the life of the scheme. Therefore, deferred tax movements have been measured at 25%.

The directors have concluded that the future corporation tax rate of 25% should apply to the recognition of deferred tax on the pension
scheme surplus, reflecting the directors’ intention regarding the manner of recovery of the deferred tax asset.

Deferred tax is recognised in the statement of profit or loss except when it relates to items credited or charged directly to OCI, in which case
the deferred tax is also recognised in equity.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary
difference can be utilised. Their carrying amount is reviewed at each balance sheet date on the same basis.

136

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and when the Group
intends to settle its current tax assets and liabilities on a net basis.

When assessing whether the recognition of a deferred tax asset can be justified, and if so at what level, the directors take into account the
following:

• Historic business performance

• Projected profits or losses and other relevant information that allow profits chargeable to corporation tax to be derived

• The total level of recognised and unrecognised losses that can be used to reduce future forecast taxable profits

• The period over which there is sufficient certainty that profits can be made that would support the recognition of an asset

Further disclosures of the amounts recognised (and unrecognised) are contained within note 9.

2.15 Employee benefits
Group companies provide a number of long-term employee benefit arrangements, primarily through pension schemes. The Group has both
defined benefit and defined contribution schemes.

Defined benefit plan
A defined benefit plan is a post-employment benefit plan that defines the amount of pension benefit that an employee will receive on
retirement, usually dependent on factors such as age, years of service and compensation.

The liability or surplus recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined
benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for remeasurement and past
service costs. Defined benefit obligations are calculated using assumptions determined by the Group with the assistance of independent
actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows using yields of high-quality corporate bonds that are denominated in the currency in which the benefits will
be paid, and that have terms to maturity approximating to the terms of the related pension liability.

Remeasurement arising from experience adjustments and changes in actuarial assumptions are charged or credited to the statement of
comprehensive income in the period in which they arise.

Past service costs, administration costs, and the net interest on the net defined benefit liability or surplus are recognised immediately in the
statement of profit or loss.

Curtailments are recognised as a past service cost when the Group makes a significant reduction in the number of employees covered by a
plan or amends the terms of a defined benefit plan so that a significant element of future service by current employees no longer qualifies
for amended benefits.

Plan assets of the defined benefit schemes include a number of assets for which quoted prices are not available. At each reporting date, the
Group determines the fair value of these assets with reference to most recently available information. The trustees of the schemes have
integrated climate change considerations into their long-term decision making and reporting processes. See note 14 for further details.

To the extent a surplus arises under IAS 19, the Group ensures that it can recognise the associated asset in line with IFRIC 14 with no
restrictions. There are no restrictions on the current realisability of the surplus.

Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Group pays fixed contributions into a separate entity and
will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are
recognised as an expense in the income statement in the periods during which services are rendered by employees. Differences between
contributions payable in the period and contributions actually paid are recognised as either accruals or prepayments in the balance sheet.

2.16 Share-based payments
The Group operates a number of equity-settled share-based compensation plans. The fair value of employee share option plans is
calculated using an option valuation model, taking into account the terms and conditions upon which the awards were granted. In
accordance with International Financial Reporting Standard 2, Share-Based Payment (‘IFRS 2’), the resulting expense is charged to the profit
and loss account over the vesting period of the options. The value of the charge is adjusted to reflect expected and actual levels of options
vesting.

The total amount to be expensed over the vesting period is determined by reference to the fair value of the share awards/options granted,
adjusted where required for the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Market
conditions are included in assumptions about the number of share awards/options that are expected to vest which is factored into the
grant date fair value for awards with these conditions attached.

At each balance sheet date, the Group revises its estimates of the number of share awards/options that are expected to vest (for those
with non-market conditions) and recognises the impact of the revision to original estimates, if any, in profit and loss, with a corresponding
adjustment to equity.

137

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

2. Accounting policies CONTINUED
2.17 Provisions
Provisions (for example property exit costs) are recognised when the Group has present legal or constructive obligations as a result of
past events, that can be reliably measured, and it is probable that an outflow of resources will be required to settle the obligation. Where
material, the Group discounts its provisions using a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a
finance expense.

2.18 Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual
provisions of the instrument.

Trade and other receivables
Trade and other receivables are initially measured at the transaction price and at the point of recognition an expected credit loss is
recognised to reflect the future risk of default. Trade receivables are subsequently measured at amortised cost less any additional, specific
provisions for impairment. A specific provision is made for impairment when there is objective evidence that the Group will not be able
to collect all amounts due according to the terms of the receivables. Trade and other receivables are written off when the Group has no
reasonable expectation of recovering the amounts due.

Trade and other receivables are discounted when the time value of money is considered material. The Group applies the IFRS 9 simplified
approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets.

To measure the expected credit losses, trade receivables and contract assets are grouped based on shared credit risk characteristics and the
days past due. The expected loss rates are based on the historical credit losses adjusted to reflect current and forward-looking information
on economic factors affecting the ability of the customers to settle the receivables. The Group has therefore concluded that the expected
loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.

The Group has certain trade receivables which are subject to a trade receivable purchase arrangement under a non-recourse facility. Trade
receivables that are sold without recourse are de-recognised when the risks and rewards of the receivables have been fully transferred
to the facility provider. The risks and rewards of the receivables are considered to be fully transferred on receipt of proceeds from the
facility provider to settle the debtor. The facility provider has no recourse to the Group in the event of non-payment by the debtor once the
proceeds have been received from the facility provider. The associated interest is recognised as interest expense in the income statement.

Bank borrowings
Interest-bearing bank loans and overdrafts are measured initially at fair value and subsequently at amortised cost, using the effective
interest rate method. Any difference between the proceeds (net of transaction costs and inclusive of debt issuance costs) and the
settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for
borrowing costs.

Trade and other payables
Trade and other payables are initially measured at fair value and subsequently measured at amortised cost. Trade payables and other
liabilities are discounted when the time value of money is considered material.

Equity instruments
Equity instruments issued by the Company are recorded at the amount of the proceeds received, net of directly attributable issue costs.

Deferred contingent consideration
Liabilities for deferred contingent consideration arising on a business combination are measured at fair value and remeasured at each
reporting date. Any changes in the fair value of deferred contingent consideration are recognised immediately in profit or loss.

2.19 Business Combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain
control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity
interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement.
Acquisition costs are expensed as incurred. Assets acquired and liabilities assumed are measured at their acquisition-date fair values.

3. Significant estimates and judgements
The following are areas of particular significance to the Group’s financial statements and may include the use of estimates. Results may
differ from actual amounts.

Significant accounting estimates
The following are considered to be the key estimates within the financial statements:

138

Premier Foods plc Annual Report for the 52 weeks ended 1 April 20233.1 Employee benefits
The present value of the Group’s defined benefit pension obligations depends on a number of actuarial assumptions. The primary
assumptions used include the discount rate applicable to scheme liabilities, the long-term rate of inflation and estimates of the mortality
applicable to scheme members. Each of the underlying assumptions is set out in more detail in note 14.

At each reporting date, and on a continuous basis, the Group reviews the macro-economic, Company and scheme specific factors
influencing each of these assumptions, using professional advice, in order to record the Group’s ongoing commitment and obligation to
defined benefit schemes in accordance with IAS 19 (Revised).

Where pensions asset valuations were not available at the reporting date, as is usual practice, valuations at 31 December 2022 are rolled
forward for cash movements to end of March 2023 to estimate the valuations for these assets. This approach is principally relevant
for Infrastructure Funds, Private Equity, Absolute Return Products, Property Assets, Illiquid Credits and Global Credits. Management
have reviewed the individual investments to establish where valuations are not expected to be available for inclusion in these financial
statements, movements in the most comparable indexes have then been applied to these investments at a category level to establish any
potential estimation uncertainty within the results.

3.2 Goodwill
Impairment reviews in respect of goodwill are performed at least annually and more regularly if there is an indicator of impairment.
Impairment reviews in respect of intangible assets are performed when an event indicates that an impairment review is necessary.
Examples of such triggering events include a significant planned restructuring, a major change in market conditions or technology,
expectations of future operating losses, or a significant reduction in cash flows. In performing its impairment analysis, the Group takes into
consideration these indicators including the difference between its market capitalisation and net assets.

The Group has considered the impact of the assumptions used on the calculations and has conducted sensitivity analysis on the value in use
calculations of the CGUs carrying values for the purposes of testing goodwill. See note 12 for further details.

3.3 Commercial arrangements
Sales rebates and discounts are accrued on each relevant promotion or customer agreement and are charged to the statement of profit
or loss at the time of the relevant promotional buy-in as a deduction from revenue. Accruals for each individual promotion or rebate
arrangement are based on the type and length of promotion and nature of customer agreement. At the time an accrual is made the nature,
funding level and timing of the promotion is typically known. Areas of estimation are sales volume/activity, phasing and the amount of
product sold on promotion.

For short-term promotions, the Group performs a true up of estimates where necessary on a monthly basis, using real time customer sales
information where possible and finally on receipt of a customer claim which typically follows 1-2 months after the end of a promotion. For
longer-term discounts and rebates the Group uses actual and forecast sales to estimate the level of rebate. These accruals are updated
monthly based on latest actual and forecast sales. If the Commercial accruals balance moved by 5% in either direction this would have an
impact of £3.4m.

Judgements
The following are considered to be the key judgements within the financial statements:

3.4 Non-trading items
Non-trading items have been presented separately throughout the financial statements. These are items that management believes require
separate disclosure by virtue of their nature in order that the users of the financial statements obtain a clear and consistent view of the
Group’s underlying trading performance. In identifying non-trading items, management have applied judgement including whether i) the
item is related to underlying trading of the Group; and/or ii) how often the item is expected to occur.

4. Segmental analysis
IFRS 8 requires operating segments to be determined based on the Group’s internal reporting to the Chief Operating Decision Maker
(‘CODM’). The CODM has been determined to be the Executive Leadership Team as it is primarily responsible for the allocation of resources
to segments and the assessment of performance of the segments.

The Group’s operating segments are defined as ‘Grocery’, ‘Sweet Treats’, and ‘International’. The CODM reviews the performance by
operating segments. The Grocery segment primarily sells savoury ambient food products and the Sweet Treats segment sells primarily
sweet ambient food products. The International segment has been aggregated within the Grocery segment for reporting purposes as
revenue is below 10% of the Group’s total revenue and the segment is considered to have similar characteristics to that of Grocery as
identified in IFRS 8. There has been no change to the segments during the period.

The CODM uses Divisional contribution as the key measure of the segments’ results. Divisional contribution is defined as gross profit after
selling, marketing and distribution costs. Divisional contribution is a consistent measure within the Group and reflects the segments’
underlying trading performance for the period under evaluation.

139

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

The Group uses trading profit to review overall Group profitability. Trading profit is defined as pre-tax profit/loss before net finance costs,
amortisation of intangible assets, fair value movements on foreign exchange and other derivative contracts, net interest on pensions and
administrative expenses, and any material items that require separate disclosure by virtue of their nature in order that users of the financial
statements obtain a clear and consistent view of the Group’s underlying trading performance.

The segment results for the period ended 1 April 2023 and for the period ended 2 April 2022 and the reconciliation of the segment
measures to the respective statutory items included in the consolidated financial statements are as follows:

External revenues
Divisional contribution
Group and corporate costs1
Other income
Trading profit1
Amortisation of brand assets
Fair value movements on foreign exchange and
other derivative contracts2
Net interest on pensions and administrative
expenses
Non-trading items:
– GMP equalisation charge
– Impairment of fixed assets3
– Restructuring costs4
– Other non-trading items5
Operating profit
Finance cost
Finance income
Profit before taxation

52 weeks ended 1 April 2023
Sweet Treats
£m

Grocery
£m

746.8
189.2

259.6
27.0

Total
£m

1,006.4
216.2
(62.5)
3.8
157.5
(20.7)

(1.8)

17.7

–
(3.6)
(11.1)
(5.8)
132.2
(21.7)
1.9
112.4

52 weeks ended 2 April 2022
Sweet Treats
£m

Grocery
£m

647.7
160.2

252.8
33.4

Total
£m

900.5
193.6
(52.4)
–
141.2
(19.9)

4.4

4.2

(0.3)
–
–
1.5
131.1
(29.0)
0.5
102.6

Depreciation6

(11.9)

(8.0)

(19.9)

(11.2)

(8.0)

(19.2)

1 The definition of Trading Profit has been changed from 2022/23, amortisation of software is included within ‘Group and corporate costs’ from the current year. 2021/22 Trading

Profit has been re-presented in line with the revised definition.

2 The loss of £1.8m (2021/22: gain of £4.4m) reflects changes in fair value rate during the 52-week period and movement in nominal value of the instruments held at 1 April 2023

from the 2 April 2022 position.

Impairment of fixed assets relates to the closure of the Knighton site.

4 Restructuring costs in the current period includes £7.6m which relates to the closure of the Knighton site with the remainder primarily relating to some supply chain

restructuring.

5 Other non-trading items relate primarily to M&A transaction costs and other one-off supply chain charges. Other non-trading items in the prior period related primarily to the

resolution of a legacy legal matter.

6 Depreciation in the period ended 1 April 2023 includes £1.6m (2021/22: £2.0m) of depreciation of IFRS 16 right of use assets.

Revenues in the period ended 1 April 2023, from the Group’s four principal customers, which individually represent over 10% of total Group
revenue, are £242.6m, £142.7m, £114.4m and £96.2m (2021/22: £224.8m, £129.0m, £97.6m and £91.7m). These revenues relate to both
the Grocery and Sweet Treats reportable segments.

The Group primarily supplies the UK market, although it also supplies certain products to other countries in Europe and the rest of the
world. The following table provides an analysis of the Group’s revenue, which is allocated on the basis of geographical market destination,
and an analysis of the Group’s non-current assets by geographical location.

Revenue

United Kingdom
Other Europe
Rest of world
Total

140

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

943.1
28.1
35.2
1,006.4

847.1
26.2
27.2
900.5

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Non-current assets

United Kingdom

Non-current assets exclude deferred tax assets and net retirement benefit assets.

5. Operating profit
5.1 Analysis of costs by nature

Employee benefits expense (note 7)
Depreciation of property, plant and equipment (note 11)
Amortisation of intangible assets (note 13)
Repairs and maintenance expenditure
Research and development costs
Non-trading items
– GMP equalisation charge
– Impairment of property, plant and equipment (note 11)
– Restructuring costs
– Other non-trading items
Auditors' remuneration (note 5.2)

5.2 Auditors’ remuneration

Fees payable to the Group’s auditors for the audit of the consolidated and parent company accounts of Premier Foods plc
– The audit of the Group’s subsidiaries, pursuant to legislation
Fees payable to the Group’s auditors and its associates for other services:
– Audit related assurance services
– Other assurance services
– Services relating to corporate finance transactions
Total auditors remuneration

The total operating profit charge for auditor remuneration was £1.5m (2021/22: £1.2m).

As at
1 April 2023
£m

As at
2 April 2022
£m

1,160.6

1,130.4

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

(209.2)
(19.9)
(25.6)
(31.6)
(8.5)

–
(3.6)
(11.1)
(5.8)
(1.5)

(183.0)
(19.2)
(27.0)
(28.4)
(7.8)

(0.3)
–
–
1.5
(1.2)

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

(1.0)
(0.2)

(0.2)
(0.1)
–
(1.5)

(0.9)
(0.1)

(0.1)
–
(0.1)
(1.2)

141

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

6. Other income
Other income in 2022/23 of £3.8m (2021/22: £nil) was a receipt following temporary interruption during the year at a manufacturing site.

7. Employees

Employee benefits expense
Wages, salaries and bonuses
GMP past service cost related to defined benefit pension schemes (note 14)
Social security costs
Termination benefits1
Share options granted to directors and employees
Contributions to defined contribution schemes (note 14)
Total

1 Termination benefits in the current period relate primarily to the closure of the Knighton site and some supply chain restructuring.

Average monthly number of people employed (including executive and non-executive directors):

Average monthly number of people employed
Management
Administration
Production, distribution and other
Total

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

(169.0)
-
(17.1)
(10.3)
(4.6)
(8.2)
(209.2)

(155.5)
(0.3)
(15.4)
(0.4)
(3.4)
(8.0)
(183.0)

52 weeks
ended
1 April 2023
Number

52 weeks
ended
2 April 2022
Number

624
380
3,318
4,322

578
414
3,378
4,370

Directors’ remuneration is disclosed in the audited section of the Directors’ Remuneration Report on pages 90 to 114, which forms part of
these consolidated financial statements.

8. Finance income and costs

Interest payable on bank loans and overdrafts
Interest payable on senior secured notes
Interest payable on revolving facility
Other interest (payable) / receivable1
Amortisation of debt issuance costs

Write off of financing costs2
Early redemption fee3
Total finance cost
Interest receivable on bank deposits
Other finance income4
Total finance income
Net finance cost

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

(7.4)
(11.5)
(0.3)
(0.6)
(1.9)
(21.7)
–
–
(21.7)
0.8
1.1
1.9
(19.8)

(4.3)
(13.4)
(0.3)
0.1
(2.1)
(20.0)
(4.3)
(4.7)
(29.0)
0.3
0.2
0.5
(28.5)

Included in other interest (payable) / receivable is £0.6m charge (2021/22: £0.8m charge) relating to non-cash interest costs on lease liabilities under IFRS 16.

2 Relates to the refinancing of the senior secured fixed rate notes due 2023 and revolving credit facility in the previous period.

3 Relates to a non-recurring payment arising on the early redemption of the £300m senior secured fixed rate notes due to mature in October 2023 as part of the refinancing of the

Group’s debt in June 2021.

4 Other finance income primarily relates to the unwind of the discount on certain of the Group's long-term provisions.

142

Premier Foods plc Annual Report for the 52 weeks ended 1 April 20239. Taxation
Current tax

Current tax
– Current period
Deferred tax
– Current period
– Prior periods
– Changes in tax rate on the opening balance
Income tax charge

Tax relating to items recorded in other comprehensive income included:

Corporation tax credit on pension movements
Deferred tax charge on increase of corporate tax rate
Deferred tax credit on prior year
Deferred tax credit/(charge) on pension movements

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

(8.1)

(6.4)

(15.8)
0.7
2.4
(20.8)

(16.5)
1.9
(4.1)
(25.1)

1 April 2023
£m

2 April 2022
£m

7.2
–
–
52.7
59.9

6.4
(17.9)
1.6
(97.9)
(107.8)

The applicable rate of corporation tax for the period is 19%. Per the Finance Act of 2021, the corporation tax rate will increase from the
current 19% to 25% starting in April 2023 and the impact of the move to a blended rate on the deferred tax balances was reflected in the
prior year. The current year deferred tax balances have been remeasured to reflect the year end rate of 25% resulting in a tax credit of
£2.4m which has been recorded in the consolidated statement of profit or loss.

The tax charge for the period differs from the standard rate of corporation tax in the United Kingdom of 19.0% (2021/22: 19.0%). The
reasons for this are explained below:

Profit before taxation
Tax charge at the domestic income tax rate of 19.0% (2021/22: 19.0%)
Tax effect of:
Non-deductible items
Recognition of previously unrecognised losses
Adjustment due to change in tax rate on the opening balances
Difference between current and deferred tax rate
Tax incentives
Adjustments to prior periods
Income tax charge

1 April 2023
£m

2 April 2022
£m

112.4
(21.4)

(0.1)
0.2
2.3
(3.5)
1.0
0.7
(20.8)

102.6
(19.5)

(0.8)
–
(4.1)
(3.1)
0.5
1.9
(25.1)

Corporation tax losses are not recognised where future recoverability is uncertain.

The difference between current and deferred tax rate of £3.5m relates to the impact of the current tax rate being 19% and the future year
deferred tax movements being measured at 25%.

The adjustments to prior periods of £0.7m (2021/22: £1.9m) relates primarily to the changes in prior period intangibles and capital
allowances following verifications in submitted returns.

143

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

9. Taxation CONTINUED
Deferred tax
Deferred tax is calculated in full on temporary differences using the tax rate appropriate to the jurisdiction in which the asset/(liability)
arises and the tax rates that are expected to apply in the periods in which the asset or liability is settled.

At 3 April 2022/4 April 2021
Acquisition of The Spice Tailor
Charged to the statement of profit or loss
Credited/(charged) to other comprehensive income
(Charged)/credited to equity
At 1 April 2023/2 April 2022

2022/23
£m

(189.8)
(5.0)
(12.7)
52.7
(0.7)
(155.5)

2021/22
£m

(57.4)
–
(18.7)
(114.2)
0.5
(189.8)

The Group has not recognised £2.2m of deferred tax assets (2021/22: £2.2m not recognised) relating to UK corporation tax losses. In
addition, the Group has not recognised a tax asset of £67.8m (2021/22: £83.9m) relating to Advanced Corporation Tax (ACT) and £75.8m
(2021/22: £76.6m) relating to capital losses. Under current legislation these can generally be carried forward indefinitely.

Deferred tax liabilities

At 4 April 2021
Charge due to change in corporate tax rate
– To statement of profit or loss
– To other comprehensive income
Current period credit/(charge)
Charged to other comprehensive income
Prior period (charge)/credit
– To statement of profit or loss
– To other comprehensive income
At 2 April 2022

At 3 April 2022
Acquisition of The Spice Tailor
Charge due to change in corporate tax rate
- To statement of profit or loss
Current period credit/(charge)
Credited to other comprehensive income
At 1 April 2023

Retirement
benefit
obligation
£m
(101.9)

Intangibles
£m
(50.1)

Leases
£m
(2.9)

Other
£m
(1.0)

(15.4)
–
1.3
–

(0.3)
–
(64.5)

(64.5)
(5.0)

(0.3)
1.5
–
(68.3)

(9.5)
(22.7)
(3.5)
(97.9)

–
1.6
(233.9)

(233.9)
–

–
(6.7)
52.7
(187.9)

(0.9)
–
–
–

–
–
(3.8)

(3.8)
–

–
3.0
–
(0.8)

(0.3)
–
–
–

–
–
(1.3)

(1.3)
–

–
–
–
(1.3)

Total
£m
(155.9)

(26.1)
(22.7)
(2.2)
(97.9)

(0.3)
1.6
(303.5)

(303.5)
(5.0)

(0.3)
(2.2)
52.7
(258.3)

144

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Deferred tax assets

At 4 April 2021
Credit due to change in corporate tax rate
– To statement of profit or loss
–To other comprehensive income
– To equity
Current period (charge)/credit
Credited to equity
Prior period credit
– To statement of profit or loss
At 2 April 2022

At 3 April 2022
Credit due to change in corporate tax rate
– To statement of profit or loss
Current period (charge)/credit
Charged to equity
Prior period credit
– To statement of profit or loss
– To equity
At 1 April 2023

Deferred tax asset on losses and accelerated tax depreciation
As at 1 April 2023
As at 2 April 2022

Net deferred tax liability
As at 1 April 2023
As at 2 April 2022

Accelerated tax
depreciation
£m
49.5

Share-based
payments
£m
2.7

12.7
–
–
(13.1)
–

2.2
51.3

51.3

2.3
(13.9)
–

0.5
–
40.2

–
–
0.1
0.7
0.4

–
3.9

3.9

–
0.5
(1.2)

0.2
0.5
3.9

Losses
£m
45.0

9.1
4.8
–
(1.2)
–

–
57.7

57.7

0.3
(2.2)
–

–
–
55.8

Other
£m
1.3

0.2
–
–
(0.7)
–

–
0.8

0.8

0.1
2.0
–

–
–
2.9

Total
£m
98.5

22.0
4.8
0.1
(14.3)
0.4

2.2
113.7

113.7

2.7
(13.6)
(1.2)

0.7
0.5
102.8

£m
22.4
23.1

£m
(177.9)
(212.9)

Where there is a legal right of offset and an intention to settle as such, deferred tax assets and liabilities may be presented on a net basis.
This is the case for most of the Group’s deferred tax balances except non-trading losses of £22.4m (2021/22: £23.1m). The remainder of
deferred tax assets have therefore been offset in the tables above. Substantial elements of the Group’s deferred tax assets and liabilities,
primarily relating to the defined benefit pension obligation, are greater than one year in nature.

145

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

10. Earnings per share
Basic earnings per share has been calculated by dividing the profit attributable to owners of the parent of £91.6m (2021/22: £77.5m profit)
by the weighted average number of ordinary shares of the Company.

Weighted average shares

Weighted average number of ordinary shares for the purpose of basic earnings per share
Effect of dilutive potential ordinary shares:
– Share options
Weighted average number of ordinary shares for the purpose of diluted earnings per share

Earnings per share calculation

2022/23
Number (m)

2021/22
Number (m)

861.2

19.5
880.7

858.8

17.0
875.8

Profit after tax (£m)
Weighted average number of shares (m)
Earnings per share (pence)

52 weeks ended 1 April 2023
Dilutive effect
of share
options

Basic

91.6
861.2
10.6

19.5
(0.2)

Diluted

91.6
880.7
10.4

52 weeks ended 2 April 2022
Dilutive effect
of share
options

Basic

77.5
858.8
9.0

17.0
(0.2)

Diluted

77.5
875.8
8.8

Dilutive effect of share options
The dilutive effect of share options is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The only dilutive potential ordinary shares of the Company are share options and share
awards. A calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the
average annual market share price of the Company’s shares) based on the monetary value of the share awards and the subscription rights
attached to the outstanding share options.

No adjustment is made to the profit or loss in calculating basic and diluted earnings per share.

Adjusted earnings per share (‘Adjusted EPS’)
Adjusted earnings per share is defined as trading profit less net regular interest, less a notional tax charge at 19.0% (2021/22: 19.0%)
divided by the weighted average number of ordinary shares of the Company.

Net regular interest is defined as net finance cost after excluding write-off of financing costs, early redemption fees, other interest payable
and other interest receivable.

Trading profit and Adjusted EPS have been reported as the directors believe these assists in providing additional useful information on the
underlying trends, performance and position of the Group.

Trading profit (note 4)1
Less net regular interest
Adjusted profit before taxation
Notional tax at 19.0% (2021/22: 19%)
Adjusted profit after taxation
Average shares in issue (m)
Adjusted basic EPS (pence)
Dilutive effect of share options
Adjusted dilutive EPS (pence)

Net regular interest
Net finance cost
Exclude other finance income
Exclude write-off of financing costs
Exclude early redemption fee
Exclude other interest payable / (receivable)
Net regular interest

1 2021/22 Trading Profit has been re-presented in line with the revised definition.

146

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

157.5
(20.3)
137.2
(26.1)
111.1
861.2
12.9
(0.3)
12.6

(19.8)
(1.1)
–
–
0.6
(20.3)

141.2
(19.8)
121.4
(23.1)
98.3
858.8
11.5
(0.2)
11.3

(28.5)
(0.2)
4.3
4.7
(0.1)
(19.8)

Premier Foods plc Annual Report for the 52 weeks ended 1 April 202311. Property, plant and equipment

Cost
At 3 April 2021
Additions
Disposals
Remeasurement
Reclassified from intangibles
Transferred into use
At 2 April 2022
Additions
Acquisition of subsidiary
Disposals
Remeasurement
Reclassified from intangibles
Transferred into use
At 1 April 2023
Accumulated depreciation and impairment
At 3 April 2021
Depreciation charge
Disposals
At 2 April 2022
Depreciation charge
Disposals
Impairment charge
At 1 April 2023

Net book value
At 2 April 2022
At 1 April 2023

Land and
buildings
£m

Plant and
equipment
£m

Assets under
construction
£m

Right of use
Assets
£m

100.3
1.7
(1.5)
–
–
0.9
101.4
1.0
–
(0.6)
–
–
0.7
102.5

(44.4)
(2.2)
1.4
(45.2)
(2.6)
0.5
–
(47.3)

56.2
55.2

334.4
9.2
(8.2)
–
–
12.6
348.0
9.1
0.1
(8.8)
–
–
7.0
355.4

(221.5)
(15.0)
7.5
(229.0)
(15.7)
8.6
(3.6)
(239.7)

119.0
115.7

14.3
7.6
–
–
0.2
(13.5)
8.6
6.4
–
–
–
0.1
(7.7)
7.4

–
–
–
–
–
–
–
–

8.6
7.4

12.9
0.5
(0.9)
(0.4)
–
–
12.1
5.7
–
(1.3)
(3.6)
–
–
12.9

(3.9)
(2.0)
0.9
(5.0)
(1.6)
1.3
–
(5.3)

7.1
7.6

Total
£m

461.9
19.0
(10.6)
(0.4)
0.2
–
470.1
22.2
0.1
(10.7)
(3.6)
0.1
–
478.2

(269.8)
(19.2)
9.8
(279.2)
(19.9)
10.4
(3.6)
(292.3)

190.9
185.9

147

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCE
Notes to the consolidated financial statements

CONTINUED

11. Property, plant and equipment CONTINUED
Included in the right of use assets are the following:

Cost
Balance at 3 April 2021
Additions
Disposals
Remeasurement
At 2 April 2022
Additions
Disposals
Remeasurement
At 1 April 2023
Accumulated depreciation and impairment
At 3 April 2021
Depreciation charge
Disposals
At 2 April 2022
Depreciation charge
Disposals
At 1 April 2023
Net book value
At 2 April 2022
At 1 April 2023

Land and
buildings
£m

Plant,
equipment &
other1
£m

9.3
–
(0.3)
(0.4)
8.6
4.8
(0.5)
(3.6)
9.3

(2.5)
(1.1)
0.3
(3.3)
(0.7)
0.5
(3.5)

5.3
5.8

3.6
0.5
(0.6)
–
3.5
0.9
(0.8)
–
3.6

(1.4)
(0.9)
0.6
(1.7)
(0.9)
0.8
(1.8)

1.8
1.8

Total
£m

12.9
0.5
(0.9)
(0.4)
12.1
5.7
(1.3)
(3.6)
12.9

(3.9)
(2.0)
0.9
(5.0)
(1.6)
1.3
(5.3)

7.1
7.6

Included in Plant, equipment & other are vehicles with a cost of £nil (2021/22: £0.2m) and NBV of £nil (2021/22: £0.0m)

The Group’s borrowings are secured on the assets of the Group including property, plant and equipment.

12. Goodwill

Carrying value
Opening balance
Acquisition of subsidiary (note 28)
Closing balance

As at
1 April 2023
£m

As at
2 April 2022
£m

646.0
34.3
680.3

646.0
–
646.0

Goodwill is allocated to the Group’s Grocery CGU. Goodwill impairment testing is performed at the Grocery CGU level, which is the lowest
level at which goodwill is allocated and monitored for internal reporting purposes.

Key assumptions
The key assumptions for calculating value in use are revenue growth, divisional contribution margin growth, long-term growth rate and
discount rate.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units. It is not amortised but is
tested annually for impairment.

148

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023
Cash flow assumptions
The cash flows and capital expenditure to maintain these used in the value in use calculation are post-tax cash flows based on the latest
Board-approved budget for the first year and the latest Board-approved forecasts in respect of the following four years which include
consideration of the impact on the Group of climate change and actions the Group are taking to reduce carbon emissions. The costs and
capital expenditure to meet the Group’s ESG targets, on page 33, are included in cashflows.

Two of the key assumptions when forecasting cash flows are revenue growth and divisional contribution margin. Revenue growth is forecast
based on known or forecast customer sales initiatives, including, to the extent agreed, customer business plans or agreements for the next
period, current and forecast new product development, promotional and marketing strategy, and specific category or geographical growth.
External factors, including the consumer environment, are also taken into account in the more short-term forecasts. The compound revenue
growth rate over the five-year forecast period is 4.9% (2021/22: 4.9% 3 year compound revenue growth rate). Note that in 2022/23 the
forecast review period has been increased from a three year to a five year review period for the purpose of Impairment reviews to align
with the five year review period now being used for the Group’s Viability assessment (see page 67).

Divisional contribution margin is forecast based on the projected mix of branded and non-branded sales, raw material input costs,
purchasing initiatives and marketing and distribution costs. Management have modelled scenarios on volume elasticity due to inflationary
pressures and the adverse impact on demand due to climate change and were within the range of Group’s existing sensitivities as disclosed
within the table below. Please also see viability analysis on pages 67 for further details on additional scenario analyses performed. The
climate scenarios modelled reflect the risks deemed material through the TFCD risk assessment on pages 41 to 45.

Long term growth rate assumptions
For the purposes of impairment testing, the cash flows are extrapolated into perpetuity using growth assumptions relevant for the business
sector. The growth rate applied of 1.16% (2021/22: 1.3%) is based on the average medium term GDP growth as the directors expect food
consumption to follow GDP growth. This is not considered to be higher than the average long-term industry growth rate.

Discount rate assumptions
The discount rate applied to the cash flows is calculated using a post-tax rate based on the weighted average cost of capital (‘WACC’) which
would be anticipated for a market participant in the Group.

The Group has considered the impact of the current economic climate in determining the appropriate discount rate to use in impairment
testing. In the current period, the post-tax rate used to discount the forecast cash flows has been determined to be 9.06% (2021/22: 7.4%).
On a pre-tax basis a discount rate of 12.08% (2021/22: 9.4%) would have been applied.

Sensitivity analysis
An illustration of the sensitivity to reasonably possible changes in key assumptions in the impairment test for the Grocery CGU is as follows:

Revenue growth
Divisional contribution margin
Long-term growth rate
Discount rate

Reasonably possible change in assumption
Increase/decrease by 3.0%
Increase/decrease by 2.0%
Increase/decrease by 0.5%
Increase/decrease by 0.5%

Impact on value in use
Increase/decrease by £283.5m/£254.0m
Increase/decrease by £150.5m
Increase/decrease by £77.1m/£67.9m
Decrease/increase by £88.0m/£99.9m

Under each of the above sensitivities no individual scenarios would trigger an impairment for the Grocery CGU. Under a combination of
reasonably possible scenarios and taking into account mitigating actions, no impairment would be triggered.

Goodwill impairment charge
There has been no goodwill impairment charge recognised in 2022/23 (2021/22: £nil).

149

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

13. Other intangible assets

Cost
At 3 April 2021
Additions
Disposals
Reclassified to property, plant & equipment
Transferred into use
At 2 April 2022
Additions
Acquisition of subsidiary
Reclassified to property, plant & equipment
Transferred into use
At 1 April 2023

Accumulated amortisation and impairment
At 3 April 2021
Disposals
Amortisation charge
At 2 April 2022
Amortisation charge
At 1 April 2023

Net book value
At 2 April 2022
At 1 April 2023

Software
£m

Licences
£m

Brands
£m

Customer
relationships
£m

Assets under
construction
£m

28.0
–
–
–
–
28.0
–
–
–
–
28.0

(28.0)
–
–
(28.0)
–
(28.0)

665.2
–
–
–
–
665.2
–
20.5
–
–
685.7

(366.2)
–
(19.9)
(386.1)
(20.7)
(406.8)

134.8
–
–
–
–
134.8
–
–
–
–
134.8

(134.8)
–
–
(134.8)
–
(134.8)

4.0
1.8
–
(0.2)
(3.6)
2.0
2.1
–
(0.1)
(1.5)
2.5

–
–
–
–
–
–

Total
£m

981.3
3.5
(19.9)
(0.2)
–
964.7
6.1
20.5
(0.1)
–
991.2

(664.1)
19.9
(27.0)
(671.2)
(25.6)
(696.8)

149.3
1.7
(19.9)
–
3.6
134.7
4.0
–
–
1.5
140.2

(135.1)
19.9
(7.1)
(122.3)
(4.9)
(127.2)

12.4
13.0

–
–

279.1
278.9

–
–

2.0
2.5

293.5
294.4

All amortisation is recognised within administrative costs.

Included in the assets under construction additions for the period are £2.8m (2021/22: £1.3m) relating to internal software
development costs.

The Group’s borrowings are secured on the assets of the Group including other intangible assets.

The material brands held on the balance sheet are as follows:

Carrying value
at
1 April 2023
£m

Estimated
useful
life remaining
Years

83.5
64.4
43.3
32.5
19.7
18.2

14
23
13
14
14
14

Bisto
Oxo
Batchelors
Mr Kipling
The Spice Tailor
Sharwood's

150

Premier Foods plc Annual Report for the 52 weeks ended 1 April 202314. Retirement benefit schemes
Defined benefit schemes
The Group operates a number of defined benefit schemes under which current and former employees have built up an entitlement to
pension benefits on their retirement. Although the Premier Foods Section, Premier Grocery Products Section and RHM Section identified
below are no longer separate schemes following the merger in 2020, historically, Premier Foods companies’ pension liabilities and ex-RHM
companies’ liabilities have been shown separately. These are as follows:

(a) The “Premier” Schemes, which comprise:
Premier Foods Pension Section of RHM Pension Scheme
Premier Grocery Products Pension Section of RHM Pension Scheme
Premier Grocery Products Ireland Pension Scheme (‘PGPIPS’)
Chivers 1987 Pension Scheme
Hillsdown Holdings Limited Pension Scheme (Scheme wound up 10 February 2023)

(b) The “RHM” Pension Schemes, which comprise:
RHM Section of the RHM Pension Scheme
Premier Foods Ireland Pension Scheme

The Premier Foods Pension Scheme (PFPS) and Premier Grocery Products Pension Scheme (PGPPS) were wound up following the merger
of assets and liabilities on a segregated basis with the RHM Pension Scheme in June 2020. The RHM Pension Scheme operates as three
sections, the RHM Section, Premier Foods Section and Premier Grocery Products Section.

The triennial valuation at 31 March 2022 for all three Sections of the RHM Pension Scheme has been agreed. The results show that the
combined actuarial deficits of the two Premier Sections have fallen by a further £58m since the interim valuations carried out on 31 March
2021. This has allowed the deficit contributions to be reduced by £5m per year for the current valuation period.

The exchange rates used to translate the overseas euro based schemes are £1.00 = €1.1582 (2021/22: £1.00 = €1.1774) for the average rate
during the period, and £1.00 = €1.1377 (2021/22: £1.00 = €1.1881) for the closing position at period end.

All defined benefit schemes are held separately from the Company under Trusts. Trustees are appointed to operate the schemes in
accordance with their respective governing documents and pensions law. The schemes meet the legal requirement for member nominated
trustees’ representation on the trustee boards. Trustee directors undertake regular training and development to ensure that they are
equipped appropriately to carry out the role. In addition, each trustee board has appointed professional advisers to give them the specialist
expertise they need to support them in the areas of investment, funding, legal, covenant and administration.

The trustee boards generally meet at least four times a year to conduct their business. To support these meetings certain aspects of the
schemes’ operation are delegated to give specialist focus (e.g. investment, administration and compliance) to committees for which further
meetings are held as appropriate throughout the year. These committees regularly report to the full trustee boards.

The schemes invest through investment managers appointed by the trustees in a broad range of assets to support the security and funding
of their pension obligations. Asset classes used include government bonds, private equity, absolute return products, swaps, infrastructure,
illiquid credits and global credits.

The scheme assets do not include any of the Group’s own financial instruments, nor any property occupied by, or other assets used by, the
Group. The RHM Pension Scheme holds a security over the assets of the Group which ranks pari passu with the banks and bondholders in
the event of insolvency, up to a cap.

The schemes incorporate a Liability Driven Investment (LDI) strategy to more closely match the assets with changes in value of liabilities.
The RHM Pension Scheme uses assets including interest rate and inflation swaps, index linked bonds and infrastructure in its LDI strategy.

In setting the investment strategy, the primary concern for the trustee of the RHM Pension Scheme is to act in the best financial interests
of all beneficiaries, seeking the best return that is consistent with a prudent and appropriate level of risk. This includes the risk that
environmental, social and governance factors, including climate change, negatively impact the value of investments held if not understood
and evaluated properly. The trustee considers this risk by taking advice from its investment advisors when choosing asset classes, selecting
managers, and monitoring performance.

From 1 October 2022, the trustee is required by regulation to:

•

implement climate change governance measures and produce a Taskforce on Climate-related Financial Disclosures (TCFD) report
containing associated disclosures; and

• publish its TCFD report on a publicly available website, accessible free of charge.

151

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

14. Retirement benefit schemes CONTINUED
The trustee is on track to disclose the scheme’s first TCFD report as part of the 2023 year-end reporting cycle.

The main risks to which the Group is exposed in relation to the funded pension schemes are as follows:

•

Liquidity risk – the PF and PGP Sections of the RHM Pension Scheme have significant technical funding deficits which could increase.
The RHM Section of the RHM Pension Scheme is currently in surplus, but subsequent valuations could reveal a deficit. As such this could
have an adverse impact on the financial condition of the Group. The Group continues to monitor the pension risks closely working with
the trustees to ensure a collaborative approach.

• Mortality risk – the assumptions adopted make allowance for future improvements in life expectancy. However, if life expectancy

improves at a faster rate than assumed, this would result in greater payments from the schemes and consequently increases in the
schemes liabilities. The trustees review the mortality assumption on a regular basis to minimise the risk of using an inappropriate
assumption.

• Yield risk – a fall in government bond yields will increase the schemes liabilities and certain of the assets. However, the liabilities may

grow by more in monetary terms, thus increasing the deficit in the scheme.

•

Inflation risk – the majority of the schemes liabilities increase in line with inflation and so if inflation is greater than expected, the
liabilities will increase.

•

Investment risk – the risk that investments do not perform in line with expectations.

The exposure to the yield and inflation risks described above can be hedged by investing in assets that move in the same direction as the
liabilities in the event of a fall in yields, or a rise in inflation. The RHM Pension Scheme has largely hedged its inflation and interest rate
exposure to the extent of its funding level. The Premier Foods Section is currently hedged to around 60% for interest rates and inflation and
the Premier Grocery Products Sections is currently hedged to around 75% for interest rates and inflation.

The liabilities of the schemes are approximately 35% in respect of former active members who have yet to retire and approximately 65% in
respect of pensioner members already in receipt of benefits.

The average duration of the pension liabilities for the three Sections of the RHM Pension Scheme is 13.0 years (12.8 years for the RHM
Section; 13.9 years for the PF Section and 13.4 years for the PGP Section).

All pension schemes are closed to future accrual.

At the balance sheet date, the combined principal accounting valuation assumptions were as follows:

Discount rate
Inflation – RPI
Inflation – CPI
Future pension increases
– RPI (min 0% and max 5%)
– CPI (min 3% and max 5%)

At 1 April 2023

At 2 April 2022

Premier
Schemes

RHM
Schemes

Premier
Schemes

RHM Schemes

4.80%
3.30%
2.85%

3.05%
3.55%

4.80%
3.30%
2.85%

3.05%
3.55%

2.75%
3.60%
3.20%

3.35%
3.65%

2.75%
3.60%
3.20%

3.35%
3.65%

For the smaller overseas schemes, the discount rate used was 3.65% (2021/22: 1.75%) and future pension increases were 2.45%
(2021/22: 2.60%).

At 1 April 2023 and 2 April 2022, the discount rate was derived based on a bond yield curve expanded to also include bonds rated AA by
one credit agency (and which might for example be rated A or AAA by other agencies).

The Group continued to set RPI inflation in line with the market break-even expectations less an inflation risk premium. The inflation risk
premium of 0.3% (2021/22: 0.3%), reflects an allowance for additional market distortions caused by the RPI reform proposals.

The Group has set the CPI assumption by assuming it is 1.0% p.a. lower than RPI pre 2030 (reflecting UKSA’s stated intention to make no
changes before 2030) and 0.1% lower than RPI post 2030 (2021/22: 0.1% lower post 2030), this being our expectation of the long-term
average difference between CPI and CPI-H. Using this approach, the assumed difference between the RPI and CPI is an average of 0.45%
(2021/22: 0.40%) per annum.

The assumptions take into account the timing of the expected future cashflows from the pension schemes.

The RHM scheme invests directly in interest rate and inflation swaps to protect from fluctuations in interest rates and inflation.

152

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023
The mortality assumptions are based on standard mortality tables. The directors have considered the impact of the current Covid-19
pandemic on the mortality assumptions and consider that use of the updated Continuous Mortality Improvement (CMI) 2021 projections
released in March 2022 for the future improvement assumption a reasonable approach, these are the most recently published projections
at the reporting date. Management considers the 2020 and 2021 mortality experience to be outliers and therefore have applied a 0%
weight to the 2020 and 2021 mortality experience data. However, an addition to the mortality scaling factors of 5% (2021/22: 2%) has been
applied, which reflects the expected long term negative outlook from the impact of Covid-19 on future life expectancy. The increase in
scaling factor from the prior year reflects experience that has emerged over the past 12 months. The estimated impact of the 3% addition
to the mortality scaling factors is approximately 0.8% decrease in defined benefit obligation in respect of the schemes.

An adjustment to the base mortality tables has been made for the RHM scheme to reflect the latest scheme mortality studies which were
commissioned by the trustee in 2022. The life expectancy assumptions are as follows:

Male pensioner, currently aged 65
Female pensioner, currently aged 65
Male non-pensioner, currently aged 45
Female non-pensioner, currently aged 45

At 1 April 2023

At 2 April 2022

Premier
Schemes

RHM
Schemes

86.5
88.2
87.4
89.7

84.7
87.1
86.0
89.0

Premier
Schemes
86.6
88.3
87.5
89.8

RHM
Schemes
85.2
87.7
86.5
89.3

A sensitivity analysis on the principal assumptions used to measure the scheme liabilities at the period end is as follows:

Discount rate
Inflation
Assumed life expectancy at age 60 (rate of mortality)

Change in assumption
Increase/decrease by 0.1%
Increase/decrease by 0.1%
Increase/decrease by 1 year

Impact on scheme liabilities
Decrease/increase by £39.2m/£39.8m
Increase/decrease by £16.6m/£11.9m
Increase/decrease by £122.0m/£125.0m

The sensitivity information has been derived using projected cash flows for the Schemes valued using the relevant assumptions and
membership profile as at 1 April 2023. Extrapolation of these results beyond the sensitivity figures shown may not be appropriate.

Assets with a quoted price
in an active market at 1 April 2023:

Government bonds

Cash
Assets without a quoted price
in an active market at 1 April 2023:

UK equities

Global equities

Government bonds

Corporate bonds

UK property

European property
Absolute return products

Infrastructure funds

Interest rate swaps

Inflation swaps

Private equity

LDI

Global credit

Illiquid credit

Cash

Other1
Fair value of scheme assets
as at 1 April 2023

Premier
Schemes
£m

% of total
%

RHM
Schemes
£m

% of total
%

Total
£m

% of total
%

197.8

8.2

0.1

2.3

30.5

7.4

68.7

44.7
6.8

27.4

–

48.8

–

4.3

101.4

0.5

3.7

552.6

35.8

1.5

0.0

0.4

5.5

1.4

12.4

8.1
1.2

5.0

–

8.8

–

0.8

18.3

0.1

0.7

815.1

59.1

–

4.6

2.1

4.9

213.8

204.8
426.6

342.5

286.6

43.4

310.8

7.1

205.9

227.5

0.1

85.3

25.2

1.8

–

0.1

0.2

6.6

6.3
13.2

10.6

8.8

1.3

9.6

0.2

6.4

7.0

0.0

2.6

1,012.9

67.3

0.1

6.9

32.6

12.3

282.5

249.5
433.4

369.9

286.6

43.4

359.6

7.1

210.2

328.9

0.6

89.0

26.7

1.8

0.0

0.2

0.9

0.3

7.4

6.6
11.4

9.8

7.6

1.1

9.5

0.2

5.5

8.7

0.0

2.3

100%

3,240.2

100%

3,792.8

100%

153

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

14. Retirement benefit schemes CONTINUED

Premier
Schemes
£m

% of total
%

RHM
Schemes
£m

% of total
%

Total
£m

% of total
%

Assets with a quoted price
in an active market at 2 April 2022:

Government bonds

Cash
Assets without a quoted price
in an active market at 2 April 2022:

UK equities

Global equities

Government bonds

Corporate bonds

UK property

European property

Absolute return products

Infrastructure funds

Interest rate swaps

Inflation swaps

Private equity

LDI

Global credit

Illiquid credit

Cash

Other1

337.1

27.9

0.1

4.3

31.8

0.3

84.9

38.3

62.5

26.7

0.1

–

39.9

–

74.3

81.6

9.8

6.7

40.8

3.4

0.0

0.5

3.9

0.0

10.3

4.6

7.6

3.2

0.0

–

4.8

–

9.0

9.9

1.2

0.8

842.3

76.0

0.3

5.7

2.5

6.0

285.4

168.3

872.2

338.0

397.4

93.4

280.1

7.7

554.3

191.6

0.1

152.4

Fair value of scheme assets as at 2 April 2022

826.3

100%

4,273.7

19.7

1.8

0.0

0.1

6.7

3.9

20.4

7.9

9.3

2.2

6.5

0.2

13.0

4.5

0.0

3.6

100%

1,179.4

103.9

0.4

10.0

34.3

6.3

370.3

206.6

934.7

364.7

397.5

93.4

320.0

7.7

628.6

273.2

9.9

159.1

5,100.0

23.1

2.0

0.0

0.2

0.7

0.1

7.3

4.0

18.3

7.2

7.8

1.8

6.3

0.2

12.3

5.4

0.2

3.1

100%

Included in Other in the RHM Schemes is £nil (2021/22: £111.2m) of assets which have been sold during 2020/21 and were awaiting settlement at the year-end date.

For assets without a quoted price in an active market fair value is determined with reference to net asset value statements provided by
third parties.

Pension assets have been reported using 31 March 2023 valuations where available. As is usual practice for pensions assets where
valuations at this date were not available, the most recent valuations (predominantly at 31 December 2022) have been rolled forward for
cash movements to 31 March 2023 and recognised as lagged valuations. This is considered by management the most appropriate estimate
of valuations for these assets using the information available at the time. At 1 April 2023 the financial statements include £371m of assets
using lagged valuations and were these lagged valuations to move by 1% there would be a £3.7m impact on the fair value of scheme assets.
This approach is principally relevant for Private Equity, Property Assets, Illiquid Credits and Global Credits asset categories. Pension assets
valuations are subject to estimation uncertainty due to market volatility, which could result in a material movement in asset values over the
next 12 months.

The amounts recognised in the balance sheet arising from the Group’s obligations in respect of its defined benefit schemes are as follows:

Present value of funded obligations
Fair value of scheme assets
(Deficit)/surplus in schemes

Premier
Schemes
£m

(735.4)
552.6
(182.8)

At 1 April 2023
RHM
Schemes
£m

(2,291.9)
3,240.2
948.3

Premier
Schemes
£m

(1,020.2)
826.3
(193.9)

At 2 April 2022
RHM
Schemes
£m

(3,134.9)
4,273.7
1,138.8

Total
£m

(3,027.3)
3,792.8
765.5

Total
£m

(4,155.1)
5,100.0
944.9

The aggregate surplus of £944.9m has decreased to a surplus of £765.5m in the current period. This decrease of £179.4m (2021/22:
£405.0m increase) is primarily due to a lower return on scheme assets partly offset by changes in financial assumptions, being higher
discount rate offset to a lesser extent by higher inflation assumptions. Further details are provided later in this note.

154

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

The disclosures in note 14 represent those schemes that are associated with Premier (‘Premier schemes’) and those that are associated
with ex-RHM companies (‘RHM Schemes’). These differ to that disclosed on the balance sheet, in which the schemes have been split
between those in an asset position and those in a liability position. The disclosures in note 14 reconcile to those disclosed on the balance
sheet as shown below:

Schemes in net asset position
Schemes in net liability position
Net (Deficit)/surplus in schemes

Premier
Schemes
£m

11.8
(194.6)
(182.8)

At 1 April 2023
RHM
Schemes
£m

948.3
–
948.3

Total
£m

960.1
(194.6)
765.5

Changes in the present value of the defined benefit obligation were as follows:

Defined benefit obligation at 3 April 2021
Interest cost
Past service cost
Settlement
Remeasurement gain
Exchange differences
Benefits paid
Defined benefit obligation at 2 April 2022
Interest cost
Settlement
Remeasurement gain
Exchange differences
Benefits paid
Defined benefit obligation at 1 April 2023

Changes in the fair value of scheme assets were as follows:

Fair value of scheme assets at 3 April 2021
Interest income on scheme assets
Remeasurement gains/(losses)
Administrative costs
Settlement
Contributions by employer
Additional employer contribution1
Exchange differences
Benefits paid
Fair value of scheme assets at 2 April 2022
Interest income on scheme assets
Remeasurement losses
Administrative costs
Settlement
Contributions by employer
Additional employer contribution1
Exchange differences
Benefits paid
Fair value of scheme assets at 1 April 2023

1 Contribution by the Group to the Premier Schemes due to the payment of dividends during the year.

Premier
Schemes
£m

9.9
(203.8)
(193.9)

Premier
Schemes
£m
(1,175.1)
(22.7)
(0.1)
0.2
139.7
0.5
37.3
(1,020.2)
(27.0)
0.3
271.9
(1.6)
41.2
(735.4)

Premier
Schemes
£m
792.5
15.3
17.5
(4.2)
(0.3)
40.9
2.5
(0.6)
(37.3)
826.3
22.1
(295.7)
(4.2)
(0.3)
40.6
2.7
2.3
(41.2)
552.6

At 2 April 2022
RHM
Schemes
£m

1,138.8
–
1,138.8

RHM
Schemes
£m
(3,536.9)
(68.9)
(0.2)
–
333.5
0.2
137.4
(3,134.9)
(83.9)
–
787.3
(1.1)
140.7
(2,291.9)

RHM
Schemes
£m
4,459.4
87.3
(133.4)
(2.5)
–
0.5
–
(0.2)
(137.4)
4,273.7
115.1
(1,009.1)
(4.4)
–
4.5
–
1.1
(140.7)
3,240.2

Total
£m

1,148.7
(203.8)
944.9

Total
£m
(4,712.0)
(91.6)
(0.3)
0.2
473.2
0.7
174.7
(4,155.1)
(110.9)
0.3
1,059.2
(2.7)
181.9
(3,027.3)

Total
£m
5,251.9
102.6
(115.9)
(6.7)
(0.3)
41.4
2.5
(0.8)
(174.7)
5,100.0
137.2
(1,304.8)
(8.6)
(0.3)
45.1
2.7
3.4
(181.9)
3,792.8

155

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCE

Notes to the consolidated financial statements

CONTINUED

14. Retirement benefit schemes CONTINUED
The reconciliation of the net defined benefit (deficit)/surplus over the period is as follows:

(Deficit)/surplus in schemes at 3 April 2021
Amount recognised in profit or loss
Remeasurements recognised in other comprehensive income
Contributions by employer
Additional employer contribution1
Exchange differences recognised in other comprehensive income
(Deficit)/surplus in schemes at 2 April 2022
Amount recognised in profit or loss
Remeasurements recognised in other comprehensive income
Contributions by employer
Additional employer contribution1
Exchange differences recognised in other comprehensive income
(Deficit)/surplus in schemes at 1 April 2023

Premier
Schemes
£m

RHM
Schemes
£m

(382.6)
(11.8)
157.2
40.9
2.5
(0.1)
(193.9)
(9.1)
(23.8)
40.6
2.7
0.7
(182.8)

922.5
15.7
200.1
0.5
–
–
1,138.8
26.8
(221.8)
4.5
–
–
948.3

1 Contribution by the Group to the Premier Schemes due to the payment of dividends during the year.

Remeasurements recognised in the consolidated statement of comprehensive income are as follows:

Remeasurement gain on scheme liabilities
Remeasurement (loss)/gain on scheme assets
Net remeasurement (loss)/gain for the period

52 weeks ended 1 April 2023

52 weeks ended 2 April 2022

Premier
Schemes
£m

271.9
(295.7)
(23.8)

RHM
Schemes
£m

787.3
(1,009.1)
(221.8)

Total
£m

1,059.2
(1,304.8)
(245.6)

Premier
Schemes
£m

139.7
17.5
157.2

RHM
Schemes
£m

333.5
(133.4)
200.1

Total
£m

539.9
3.9
357.3
41.4
2.5
(0.1)
944.9
17.7
(245.6)
45.1
2.7
0.7
765.5

Total
£m

473.2
(115.9)
357.3

The actual return on scheme assets was a £1,167.6m loss (2021/22: £13.3m loss), which is £1,304.8m less (2021/22: £115.9m less) than the
interest income on scheme assets of £137.2m (2021/22: £102.6m).

The remeasurement gain on liabilities of £1,059.2m (2021/22: £473.2m gain) comprises a gain due to changes in financial assumptions of
£1,089.8m (2021/22: £413.3m gain), a loss due to member experience of £69.7m (2021/22: £3.2m loss) and a gain due to demographic
assumptions of £39.1m (2021/22: £63.1m gain).

The Group expects to contribute £6m annually to its defined benefit schemes in relation to expenses and government levies and £33m of
additional annual contributions to fund the scheme deficits up to 2 April 2024.

The Group has concluded that it has an unconditional right to a refund of any surplus in the RHM Pension Scheme once the liabilities have
been discharged and, that the trustees of the RHM Pension Scheme do not have the unilateral right to wind up the scheme, so the asset has
not been restricted and no additional liability has been recognised.

The total amounts recognised in the consolidated statement of profit or loss are as follows:

Operating profit
Past service cost
Settlement costs
Administrative costs
Net interest (cost)/credit
Total (cost)/credit

52 weeks ended 1 April 2023

52 weeks ended 2 April 2022

Premier
Schemes
£m

RHM
Schemes
£m

–
–
(4.2)
(4.9)
(9.1)

–
–
(4.4)
31.2
26.8

Total
£m

–
–
(8.6)
26.3
17.7

Premier
Schemes
£m

RHM
Schemes
£m

(0.1)
(0.1)
(4.2)
(7.4)
(11.8)

(0.2)
–
(2.5)
18.4
15.7

Total
£m

(0.3)
(0.1)
(6.7)
11.0
3.9

Defined contribution schemes
A number of companies in the Group operate defined contribution schemes, including provisions to comply with auto enrolment
requirements laid down by law. In addition, a number of schemes providing life assurance benefits only are operated. The total expense
recognised in the statement of profit or loss of £8.2m (2021/22: £8.0m) represents contributions payable to the schemes by the Group at
rates specified in the rules of the schemes.

156

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

15. Inventories

Raw materials
Work in progress
Finished goods and goods for resale
Total inventories

As at
1 April 2023
£m

As at
2 April 2022
£m

20.6
3.5
69.6
93.7

18.5
2.8
56.8
78.1

Stock write-offs in the period amounted to £7.6m (2021/22: £3.7m). The increase in the current period is primarily related to one-off supply
chain disruption and the closure of the Knighton site.

The borrowings of the Group are secured on the assets of the Group including inventories.

16. Trade and other receivables

Trade receivables
Trade receivables provided for
Net trade receivables
Prepayments
Corporation tax
Other tax and social security receivable
Other receivables
Total trade and other receivables

As at
1 April 2023
£m

As at
2 April 2022
£m

70.8
(2.9)
67.9
19.0
0.6
13.6
2.8
103.9

71.4
(2.6)
68.8
16.3
–
11.2
0.2
96.5

The borrowings of the Group are secured on the assets of the Group including trade and other receivables.

During the period, the Group continued to operate the trade receivable purchase arrangement. This is a non-recourse arrangement and
therefore amounts are derecognised when sold. As at 1 April 2023, £28.7 million was drawn (2021/22: £28.5 million) under the non-
recourse arrangement.

17. Notes to the cash flow statement
Reconciliation of profit before taxation to cash flows from operations

Profit before taxation
Net finance cost
Operating profit
Depreciation of property, plant and equipment
Amortisation of intangible assets
Loss on disposal of non-current assets
Impairment of tangible assets
Fair value movements on foreign exchange and other derivative contracts
Net interest on pensions and administrative expenses1
Equity settled employee incentive schemes
GMP equalisation and past service cost related to defined benefit pension schemes
Increase in inventories
Increase in trade and other receivables
Increase in trade and other payables and provisions
Additional employer contribution2
Contribution to defined benefit pension schemes
Cash generated from operations

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

112.4
19.8
132.2
19.9
25.6
0.3
3.6
1.8
(17.7)
4.6
–
(12.4)
(1.9)
0.1
(2.7)
(45.1)
108.3

102.6
28.5
131.1
19.2
27.0
0.7
–
(4.4)
(4.2)
3.4
0.3
(9.3)
(13.1)
4.1
(2.5)
(41.4)
110.9

1 For 2021/22 £4.2m has been re-classified from Contribution to defined benefit pension schemes to Net interest on pensions and administrative expenses to aid comparability.

2 Contribution by the Group to the Premier schemes due to the payment of dividends during the year.

157

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

17. Notes to the cash flow statement CONTINUED
Reconciliation of cash and cash equivalents to net borrowings

Net inflow of cash and cash equivalents
Movement in lease liabilities
Increase in borrowings
Debt issuance costs in the period
Other non-cash movements
Decrease in borrowings net of cash
Total net borrowings at beginning of period
Total net borrowings at end of period

Analysis of movement in borrowings

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

9.1
2.8
–
0.7
(1.9)
10.7
(285.0)
(274.3)

53.2
2.5
(10.0)
8.5
(6.5)
47.7
(332.7)
(285.0)

Bank overdrafts
Cash and bank deposits
Net cash and cash equivalents
Borrowings – Senior Secured Fixed Rate Notes maturing October 2026
Lease liabilities
Gross borrowings net of cash1
Debt issuance costs2
Total net borrowings1
Total net borrowings excluding lease liabilities1

1 Borrowings exclude derivative financial instruments.

As at
2 April 2022
£m
–
54.3
54.3
(330.0)
(16.1)
(291.8)
6.8
(285.0)
(268.9)

Cash flows
£m
(1.0)
10.1
9.1
–
2.9
12.0
0.7
12.7
9.8

Non-cash
interest
expense
£m
–
–
–
–
(0.6)
(0.6)
(1.9)
(2.5)
(1.9)

Other
non-cash
movements
£m
–
–
–
–
0.5
0.5
–
0.5
–

As at
1 April 2023
£m

(1.0)
64.4
63.4
(330.0)
(13.3)
(279.9)
5.6
(274.3)
(261.0)

2 The non-cash movement in debt issuance costs relates to the amortisation of capitalised borrowing costs only.

Cash outflows of £2.9m (2021/22: £3.3m) in relation to repayments of lease liabilities have been included in the consolidated statement of
cash flows, including £0.6m included in interest paid within cash flows from operating activities.

The Group has the following cash pooling arrangements in sterling, euros and US dollars, where both the Group and the bank have a legal
right of offset.

As at 1 April 2023

As at 2 April 2022

Offset
asset

12.6

Offset
liability

(13.6)

Net offset
liability

(1.0)

Offset
asset

8.1

Offset
liability

–

Net offset
asset

8.1

As at
1 April 2023
£m

As at
2 April 2022
£m

(141.1)
(67.5)
(7.1)
(39.7)
(255.4)

(137.4)
(75.1)
(6.6)
(34.9)
(254.0)

Cash, cash equivalents and bank overdrafts

18. Trade and other payables

Trade payables
Commercial accruals
Tax and social security payables
Other payables and accruals
Total trade and other payables

158

Premier Foods plc Annual Report for the 52 weeks ended 1 April 202319. Financial instruments
The Group’s activities expose it to a variety of financial risks: market risk (arising from adverse movements in foreign currency, commodity
prices and interest rates), credit risk and liquidity risk. The Group uses a variety of derivative financial instruments to manage certain of
these risks. The management of these risks, along with the day-to-day management of treasury activities is performed by the Treasury
function. The policy framework governing the management of these risks is defined by the Board. The framework for management of these
risks is incorporated into a policies and procedures manual.

The Group also enters into contracts with suppliers for its principal raw material requirements, some of which are considered commodities,
diesel and energy. These commodity and energy contracts are part of the Group’s normal purchasing activities. Some of the risk relating
to diesel is mitigated with the use of derivative financial instruments. The Price Risk Management Committee monitors and reviews the
Group’s foreign currency exchange, commodity price and energy price exposures and recommends appropriate hedging strategies for each.

19.1 Market risk
(i) Foreign exchange risk
The Group’s main operating entities’ functional currency and the Group’s presentational currency is sterling although some transactions
are executed in non-sterling currencies, principally the euro. The transactional amounts realised or settled are therefore subject to the
effect of movements in these currencies against sterling. Management of these exposures is centralised and managed by the Group Finance
function. It is the Group’s policy to manage the exposures arising using forward foreign currency exchange contracts and currency options.
Hedge accounting is not sought for these transactions.

The Group generates some of its profits in non-sterling currencies and has assets in non-sterling jurisdictions, principally the euro.

The principal foreign currency affecting the translation of subsidiary undertakings within the Group financial statements is the euro. The
rates applicable are as follows:

Principal rate of exchange: euro/sterling
Period ended
Average

52 weeks
ended
1 April 2023

52 weeks
ended
2 April 2022

1.1377
1.1582

1.1881
1.1774

The majority of the Group’s assets and liabilities are denominated in the functional currency of the relevant subsidiary.

The table below shows the Group’s currency exposures as at 1 April 2023 and 2 April 2022 that gave rise to net currency gains and losses
recognised in the consolidated statement of profit or loss as a result of monetary assets and liabilities that are not denominated in the
functional currency of the subsidiaries involved.

Net foreign currency monetary assets:
– Euro
– US dollar
– Other
Total

As at
1 April 2023
£m

As at
2 April 2022
£m

(5.3)
1.3
(0.2)
(4.2)

(4.9)
1.6
(0.2)
(3.5)

In addition, the Group also has forward foreign currency exchange contracts outstanding at the period end in order to manage the
exposures above but also to hedge future transactions in foreign currencies. The sterling nominal amounts outstanding are as follows:

Euro
Australian dollar
Indian rupee
Total

As at
1 April 2023
£m

As at
2 April 2022
£m

(38.7)
1.6
(7.0)
(44.1)

(50.5)
–
–
(50.5)

Sensitivities are disclosed below using the following reasonably possible scenarios:

If the euro were to weaken against sterling by 10 euro cents, with all other variables held constant, profit after tax would decrease by £2.6m
(2021/22: £3.5m decrease).

If the euro were to strengthen against sterling by 10 euro cents, with all other variables held constant, profit after tax would increase by
£3.0m (2021/22: £4.1m increase).

159

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCE

Notes to the consolidated financial statements

CONTINUED

19. Financial instruments CONTINUED
(ii) Commodity price risk
The Group purchases a variety of commodities for use in production and distribution which can experience significant price volatility, which
include, inter-alia, dairy, wheat, cocoa, edible oils and energy. The price risk including inflation on these commodities is managed closely by
the Group through the Price Risk Management Committee. It is the Group’s policy to minimise its exposure to this volatility by adopting an
appropriate forward purchase strategy or by the use of derivative instruments where they are available.

(iii) Interest rate risk
The Group’s borrowing facilities comprise senior secured notes and a revolving facility, in sterling. Interest on the revolving facility is
charged at floating rates plus a margin on the amounts drawn down, and at 35% of the applicable margin for the non-utilised portion of the
facility, hence the borrowings are sensitive to changes in interest rates.

Cash and deposits earn interest at floating rates based on banks’ short-term treasury deposit rates. Short-term trade and other receivables
are interest-free.

The Group’s other financial assets and liabilities are not exposed to material interest rate risk.

19.2 Credit risk
The Group’s principal financial assets are cash and cash equivalents and trade and other receivables.

Cash and cash equivalents are deposited with high-credit quality financial institutions and although a significant amount of sales is to a
relatively small number of customers these are generally the major grocery retailers whose credit risk is considered low.

The ageing of trade and other receivables was as follows:

At 1 April 2023
Trade and other receivables
Expected loss rate
Gross carrying amount trade and
other receivables
Loss allowance

At 2 April 2022
Trade and other receivables
Expected loss rate
Gross carrying amount trade and
other receivables
Loss allowance

Fully
performing
£m

Past due
1-30 days
£m

31-60 days
£m

61-90 days
£m

91-120 days
£m

120+ days
£m

3.2%

54.1
(1.7)

3.0%

63.9
(1.9)

1.8%

13.7
(0.2)

5.9%

4.1
(0.2)

7.0%

15.2%

19.1%

57.8%

3.3
(0.2)

0.0%

0.0
(0.0)

1.3
(0.2)

0.6
(0.1)

0.6
(0.4)

1.1%

14.8%

37.4%

2.2
(0.0)

0.4
(0.1)

1.0
(0.4)

Total
£m

3.9%

73.6
(2.9)

3.7%

71.6
(2.6)

The total loss allowance includes provisions in relation to receivables from customers which are considered at risk of experiencing difficult
economic situations in the current environment.

The Group does not hold any collateral as security against its financial assets.

Movements in the provision for impairment of trade receivables are as follows:

As at 3 April 2022/4 April 2021
Receivables written off during the period as uncollectable
Provision for receivables impairment raised/(released)
As at 1 April 2023/2 April 2022

2022/23
£m

2021/22
£m

2.6
(0.2)
0.5
2.9

3.5
(0.5)
(0.4)
2.6

160

Premier Foods plc Annual Report for the 52 weeks ended 1 April 202319.3 Liquidity risk
The Group manages liquidity risk through the Treasury function. Cash flow forecasts are prepared and reviewed on a weekly basis, normally
covering a period of three months.

In addition, cash flow forecasts are prepared as part of the Group’s overall budgeting and forecasting processes and performance is
monitored against this each month. This is intended to give the Board sufficient forward visibility of debt levels.

The Group’s Net debt level can vary from month to month and there is some volatility within months. This reflects seasonal trading
patterns, timing of receipts from customers and payments to suppliers, patterns of inventory holdings and the timing of the spend on major
capital and restructuring projects. For these reasons the debt levels at the period end date may not be indicative of debt levels at other
points throughout the period.

The following table analyses the Group’s financial liabilities into relevant maturity groupings based on the contractual undiscounted
cash flows.

At 1 April 2023
Trade and other payables
Senior secured notes - fixed
Lease liabilities
At 2 April 2022
Trade and other payables
Senior secured notes - fixed1
Lease liabilities

Within 1
year
£m

1 and 2
years
£m

2 and 3
years
£m

(248.3)
(11.6)
(2.6)

(247.4)
(11.6)
(2.9)

–
(11.6)
(2.6)

–
(11.6)
(2.2)

–
(11.6)
(2.5)

3 and 4
years
£m

–
(336.7)
(1.5)

–
(11.6)
(2.2)

4 and 5
years
£m

–
–
(1.4)

–
(336.7)
(1.5)

Over 5
years
£m

–
–
(6.2)

–
–
(19.1)

Total
£m

(248.3)
(371.5)
(16.5)

(247.4)
(383.1)
(30.8)

1 Re-presented to reflect the timing of outflows to maturity at October 2026

The secured senior credit facility (revolving) is priced to SONIA, other liabilities are not re-priced before the maturity date.

At 1 April 2023, the Group had £182.0m (2021/22: £182.0m) of facilities not drawn, expiring between two to three years (2021/22: two to
four years).

The borrowings are secured by a fixed and floating charge over all the assets of the Group.

The following table analyses the contractual undiscounted cash flows of interest on the fixed rate debt to maturity.

At 1 April 2023
At 2 April 20221

Within 1
year
£m

11.6
11.6

1 and 2
years
£m

11.6
11.6

2 and 3
years
£m

11.6
11.6

3 and 4
years
£m

6.7
11.6

4 and 5
years
£m

–
6.7

Over 5
years
£m

–
–

Total
£m

41.5
53.1

1 Re-presented to reflect the timing of outflows to maturity at October 2026

161

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCE
Notes to the consolidated financial statements

CONTINUED

19. Financial instruments CONTINUED
The following table analyses the Group’s derivative financial instruments into relevant maturity groupings based on the remaining period at
the balance sheet date to the contractual maturity date. The amounts disclosed are the undiscounted cash flows.

At 1 April 2023
Forward foreign exchange contracts:
– Outflow
– Inflow
Commodities:
– Inflow
Total derivative financial instruments
At 2 April 2022
Forward foreign exchange contracts:
– Outflow
– Inflow
Commodities:
– Outflow
Total derivative financial instruments

Within 1
year
£m

1 and 2
years
£m

2 and 3
years
£m

3 and 4
years
£m

4 and 5
years
£m

Over 5
years
£m

(79.9)
80.0

0.1
0.2

(52.2)
51.7

(2.5)
(3.0)

–
–

(0.3)
(0.3)

–
–

Total
£m

(79.9)
80.0

0.1
0.2

(52.2)
51.7

(2.8)
(3.3)

19.4 Fair value
The following table shows the carrying amounts (which approximate to fair value except as noted below) of the Group’s financial assets
and financial liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Set out below is a summary of methods and assumptions used to value each
category of financial instrument.

Financial assets not measured at fair value:
Cash and cash equivalents
Financial assets at amortised cost:
Trade and other receivables
Financial assets at fair value through profit or loss:
Trade and other receivables
Derivative financial instruments
– Forward foreign currency exchange contracts
– Commodity and energy derivatives
Financial liabilities at fair value through profit or loss:
Derivative financial instruments
– Forward foreign currency exchange contracts
– Commodity and energy derivatives
Other financial liabilities at fair value through profit or loss:
– Deferred contingent consideration (note 22)
Financial liabilities at amortised cost:
Trade and other payables
Senior secured notes
Bank overdrafts

As at 1 April 2023

As at 2 April 2022

Carrying
amount
£m

Fair value
£m

Carrying
amount
£m

Fair value
£m

64.4

63.7

4.2

0.7
0.1

(0.5)
–

(8.2)

64.4

63.7

4.2

0.7
0.1

(0.5)
–

(8.2)

54.3

65.7

3.3

0.1
2.3

(0.3)
–

–

54.3

65.7

3.3

0.1
2.3

(0.3)
–

–

(248.3)
(330.0)
(1.0)

(248.3)
(297.8)
(1.0)

(247.4)
(330.0)
–

(247.4)
(305.8)
–

The following table presents the Group’s assets and liabilities that are measured at fair value using the following fair value measurement
hierarchy:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

•

Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (level 2).

•

Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

162

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

Financial assets at fair value through profit or loss:
Trade and other receivables
Derivative financial instruments
– Forward foreign currency exchange contracts
– Commodity and energy derivatives
Financial liabilities at fair value through profit or loss:
Derivative financial instruments
– Forward foreign currency exchange contracts
Other financial liabilities at fair value through profit or
loss:
– Deferred contingent consideration (note 22)
Financial liabilities at amortised cost:
Senior secured notes

As at 1 April 2023

Level 1
£m

Level 2
£m

–

–
–

–

(297.8)

1.8

0.7
0.1

(0.5)

–

Level 3
£m

2.4

–
–

–

(8.2)

As at 2 April 2022

Level 1
£m

Level 2
£m

Level 3
£m

–

–
–

–

0.1
2.3

(0.3)

–

–
–

–

(305.8)

Fair value estimation
Derivatives
Forward exchange contracts are marked to market using prevailing market prices. Hedge accounting has not been applied to forward
contracts and as a result the movement in the fair value of £0.4m has been credited to the statement of profit or loss in the period
(2021/22: £2.2m credit).

Commodity derivatives are marked to market using prevailing prices and are also not designated for hedge accounting. As a result, the fair
value movement of £2.2m has been debited to the statement of profit or loss (2021/22: £2.2m credit).

Short and long-term borrowings, loan notes and interest payable
Fair value is calculated based on discounted expected future principal and interest rate cash flows.

Trade and other receivables/payables
The carrying value of receivables/payables with a remaining life of less than one year is deemed to reflect the fair value given their short
maturity. The fair values of non-current receivables/payables are also considered to be the same as the carrying value due to the size and
nature of the balances involved.

Deferred contingent consideration
During the period, the Group recognised other receivables with a fair value of £2.4m and deferred contingent consideration with a fair
value of £8.2m as a result of the acquisition of The Spice Tailor. The fair values for both are based on unobservable inputs and are classified
as a level 3 fair value estimate under the IFRS fair value hierarchy.

19.5 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares, or sell assets to
reduce debt.

The directors propose a final dividend of 1.44 pence per share for the period ended 2 April 2022 (2021/22: 1.2 pence).

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt
divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as equity plus
net debt.

163

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

19. Financial instruments CONTINUED
The gearing ratios at the balance sheet date were as follows:

Total borrowings
Less cash and bank deposits
Net debt
Total equity
Total capital
Gearing ratio

Gearing is in line year-on-year.

As at 1 April
2023
£m

As at 2 April
2022
£m

(338.7)
64.4
(274.3)
(1,406.0)
(1,680.3)
16%

(339.3)
54.3
(285.0)
(1,506.9)
(1,791.9)
16%

Under the Group’s financing arrangement, the Group is required to meet two covenant tests which are calculated and tested on a 12-month
rolling basis at the half year and full year, each year. The Group has complied with these tests at 1 October 2022 and 1 April 2023.

19.6 Financial compliance risk
Risk
The Group operates with Net debt of £274.3m (2021/22: £285.0m) and is subject to operating within banking covenants set out in its
refinancing agreement agreed with its banking syndicate, which include Net debt/EBITDA and EBITDA/interest covenant tests. In the event
these covenants are not met then the Group would be in breach of its financing agreement and, as would be the case in any covenant
breach, the banking syndicate could withdraw their funding to the Group. The banking covenants relate to the Group’s revolving credit
facility, which was undrawn at 1 April 2023 (2021/22: undrawn).

In addition to covenant compliance the Group must ensure that it manages its liquidity such that it has sufficient funds to meet its
obligations as they fall due.

It also supports one defined benefit pension scheme in the UK, which consists of three sections of the RHM Pension Scheme. One of the
three sections has significant technical funding deficits, which could have an adverse impact on the financial condition of the Group.

Mitigation
The Group has financing arrangements which provide funding until 2026.

The Group reviews its performance on an ongoing basis and formally tests and reports on covenant compliance to the Group’s banking
syndicate at each reporting date. In the event of a forecast covenant breach the Group would seek a covenant waiver or amendment from
its banking syndicate.

The Group manages liquidity risk through the Treasury function. Cash flow forecasts are prepared and reviewed on a weekly basis, normally
covering a period of three months. In addition, cash flow forecasts are prepared as part of the Group’s overall budgeting and forecasting
processes and performance is monitored against this each month.

The Group continues to monitor the pension risks closely, working with the trustee to ensure a collaborative approach.

20. Bank and other borrowings

Current:
Bank overdrafts
Lease liabilities
Total borrowings due within one year

Non-current:
Transaction costs1
Senior secured notes

Lease liabilities
Total borrowings due after more than one year
Total bank and other borrowings

Included in transaction costs is £1.7m (2021/22: £1.9m) relating to the revolving credit facility.

164

As at
1 April 2023
£m

As at
2 April 2022
£m

(1.0)
(2.1)
(3.1)

5.6
(330.0)
(324.4)
(11.2)
(335.6)
(338.7)

–
(2.1)
(2.1)

6.8
(330.0)
(323.2)
(14.0)
(337.2)
(339.3)

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Secured senior credit facility – revolving
The RCF of £175m attracts a leverage-based margin of between 2.0% and 4.0% above SONIA. Banking covenants of net debt/EBITDA and
EBITDA/interest are in place and are tested biannually.

The covenant package attached to the revolving credit facility is:

2022/23 FY
2023/24 FY

1 Net debt, EBITDA and Interest are as defined under the revolving credit facility.

Net debt/
EBITDA1
3.50x
3.50x

Net debt/
Interest1
3.00x
3.00x

During the period, the Group announced that it had extended the period of its revolving credit facility (RCF) by one year to May 2025 with
the same lending group.

On 11 May 2023 the Group extended £148.5m of its revolving credit facility (RCF) by one year to May 2026. The covenant package attached
to the RCF and tested bi-annually is unchanged. See note 30 for further details.

Senior secured notes
The senior secured notes are listed on the Irish GEM Stock Exchange. The notes totalling £330m mature in October 2026 and attract an
interest rate of 3.5%.

21. Provisions for liabilities and charges

At 3 April 2021
Utilised during the period
Additional charge in the period
Unwind of discount
Released during the period
At 2 April 2022
Addition through business combination (note 28)
Utilised during the period
Additional charge in the period
Unwind of discount
Released during the period
At 1 April 2023

Property
£m
(8.2)
0.4
(1.0)
0.9
–
(7.9)
–
3.3
(2.9)
1.1
0.2
(6.2)

Other
£m
(6.4)
1.2
–
–
2.5
(2.7)
(2.5)
0.1
(8.8)
–
0.2
(13.7)

Total
£m
(14.6)
1.6
(1.0)
0.9
2.5
(10.6)
(2.5)
3.4
(11.7)
1.1
0.4
(19.9)

During the period, as a result of the acquisition of The Spice Tailor, the Group recognised provisions of £2.5m, including £2.4m in relation to
the fair value of contingent liabilities acquired as part of the business combination. See note 28 for further details.

Property provisions primarily relate to provisions for dilapidations against leasehold properties and environmental liabilities. These
provisions have been discounted at rates between 3.43% and 3.84% (2021/22: 1.37% and 1.73%). The unwinding of the discount is charged
or credited to the statement of profit or loss under net finance cost. Other provisions primarily relate to provisions for restructuring costs
and legal matters.

The ageing of the provisions is below:

Ageing of total provisions:
Within one year
Between 2 and 5 years
After 5 years
Total

As at
1 April 2023
£m

As at
2 April 2022
£m

(13.3)
(4.9)
(1.7)
(19.9)

(2.3)
(2.9)
(5.4)
(10.6)

165

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

22. Other liabilities

Deferred income
Deferred contingent consideration (note 28)
Other liabilities

As at
1 April 2023
£m

As at
2 April 2022
£m

(4.7)
(8.2)
(12.9)

(5.7)
–
(5.7)

Deferred income relates to amounts received in relation to a previously disposed business.

23. Reserves and share capital
Share premium
The share premium reserve comprises the premium paid over the nominal value of shares for shares issued.

Merger reserve
The merger reserve comprises the non-statutory premium arising on shares issued as consideration for acquisition of subsidiaries where
merger relief applies, less subsequent realised losses relating to those acquisitions.

Other reserves
Other reserves comprise the hedging reserve, which represents the effective portion of the gains or losses on derivative financial
instruments that have historically been designated as hedges.

Retained earnings
Retained earnings represents the cumulative profit or loss and the own shares reserve which represents the cost of shares in Premier Foods
plc, purchased in the market and held by the Employee Benefit Trust on behalf of the Company in order to satisfy options and awards under
the Company’s incentive schemes. 4,511,923 shares in Premier Foods plc were held by the Employee Benefit Trust at 1 April 2023, with a
market value of £5.5m (2021/22: 2,989,069 shares with a market value of £3.5m).

Share capital

At 3 April 2021
Shares issued under share schemes
At 2 April 2022
Shares issued under share schemes
At 1 April 2023

Ordinary
shares at
nominal value
(£0.10/share)
£m
85.5
0.8
86.3
0.5
86.8

Share premium
£m
0.6
0.9
1.5
1.0
2.5

Number of
shares
855,126,805
7,658,472
862,785,277
5,312,933
868,098,210

Total
£m
86.1
1.7
87.8
1.5
89.3

Share award schemes
The Company’s share award schemes are summarised as follows:

1. A Long-Term Incentive Plan (‘LTIP’) for executive directors and senior managers, approved by shareholders in 2011 and a 10 year LTIP
approved by shareholders in 2021. The LTIP is comprised of performance shares whereby participants have the right to subscribe for
ordinary shares at nil cost. These awards are equity-settled and have a maximum term of three years. The vesting of the 2020, 2021 and
2022 Performance Share awards are conditional on achievement of a combination of absolute adjusted earnings per share targets and
relative TSR targets. The targets for 2020 and 2021 were based 1/3 absolute adjusted earnings per share targets and 2/3 relative TSR
targets. The targets for 2022 were based ½ absolute adjusted earnings per share targets and ½ relative TSR targets. During the period
the EPS and TSR elements of the 2019 LTIP vested in full. The EPS and TSR targets for the 2020 LTIP award have been achieved which
will result in full vesting for the adjusted earnings per share targets and 80% vesting for the relative TSR targets in August 2023.

2. A Restricted Stock Plan (‘RSP’) which provides specific ad hoc share awards to managers. Awards are normally subject only to

continued employment and may be equity-settled or cash-settled and normally have a retention term of two to three years for senior
management.

3. A Share Incentive Plan (‘SIP’) for all employees. An award of free shares was made to all employees in 2014 by the Company under
this HMRC tax-advantaged plan. Free shares are held by a trustee for a minimum of three years. Subject to continuing employment,
participants may elect to remove shares from the trust after this three-year holding period, however, there are tax and National
Insurance advantages for the employee should the shares be left in the trust for over five years. No further awards under this plan are
currently anticipated.

166

Premier Foods plc Annual Report for the 52 weeks ended 1 April 20234. A Deferred Bonus Plan (‘DBP’). One third of any annual bonus payment awarded to executive directors is made in the form of shares.
These shares are awarded under the terms of the DBP which was approved by shareholders in July 2017. Awards will normally be
made within six weeks following the announcement of the Group’s full year results in the form of nil cost options. The awards will
normally vest on the third anniversary of grant and, if awarded in the form of nil cost options, will then be exercisable up until the tenth
anniversary of grant.

Details of the share awards during the period are as follows:

At 1 April 2023, the maximum number of shares which could be awarded under the Group’s Long-Term Incentive Plan schemes was
15,635,840 (2021/22: 16,995,294), of which 5,513,858 (2021/22: 4,309,124) had vested and were exercisable at the end of the period.
During the period, conditional share awards were granted for 2,617,621 (2021/22: 2,389,841) shares and rights to 3,401,923 (2021/22:
3,862,637) shares lapsed or were forfeited.

At 1 April 2023, the maximum number of shares which could be awarded under the Group’s Restricted Stock Plan schemes was 238,594
(2021/22: 248,907), of which 1,500 (2021/22: 1,500) had vested and were exercisable at the end of the period. During the period, awards
were granted for nil shares (2021/22: 247,407) and rights to 10,313 (2021/22: nil) shares lapsed or were forfeited.

At 1 April 2023, the number of shares outstanding under the Group’s Share Incentive Plan was 370,157 (2021/22: 426,157), of which
370,157 (2021/22: 426,157) were exercisable at the end of the period. During the period, no (2021/22: no awards) awards were granted
and rights to 49,500 (2021/22: 80,456) shares were exercised.

At 1 April 2023, the number of shares outstanding under the Group’s Deferred Bonus Plan schemes was 722,858 (2021/22: 674,752), of
which 172,543 (2021/22: nil) had vested and were exercisable at the end of the period. During the period, awards were granted for 269,831
(2021/22: 282,377) shares and rights to nil (2021/22: 423,856) shares were transferred or sold.

Share option schemes
The Company’s share option schemes are summarised as follows:

A Savings Related Share Option Scheme (‘Sharesave Plan’) for all employees. The employees involved in this HMRC tax-advantaged save as
you earn scheme have the right to subscribe for up to 17.1 million ordinary shares. The number of shares subject to options, the periods
in which they were granted and the periods in which they may be exercised are given below. These options are equity-settled, have a
maximum term of 3.5 years and generally vest only if employees remain in employment to the vesting date.

At 1 April 2023, the number of shares outstanding under the Group’s Sharesave Plan was 10,971,128 with a weighted average exercise price
at the date of exercise of 76p (2021/22: 13,779,775 shares, 56p), including 644,584 shares which had vested and were exercisable at the
end of the period with a weighted average exercise price of 29p (2021/22: 574,680 shares, 31p). The options outstanding at the end of the
period had a range of exercise prices from 29p to 85p (2021/22: 29p to 83p) and a weighted average life of 1.7 years (2021/22: 1.6 years).

During the period, options were granted under the Sharesave Plan for 3,296,113 shares with a weighted average exercise price at the date
of exercise of 85p (2021/22: 3,296,388 shares, 83p). During the period options were exercised for 5,312,933 shares with a weighted average
exercise price of 30p (2021/22: 4,158,472 shares, 31p) and options for 791,807 shares with a weighted average exercise price of 67p lapsed
or were forfeited (2021/22: 943,835 shares, 50p).

The Group uses the Black-Scholes model to determine the fair value of share options at grant dates offered under the Sharesave plan. Fair
values determined from the model use assumptions that are revised for each share-based payment arrangement.

The expected Premier Foods plc share price volatility was determined using an average for food producers as at the date of grant. Current
dividend yield and risk-free rate determined from market yield curves for government gilts with outstanding terms equal to the average
expected term to exercise for each relevant grant.

In 2022/23, the Group recognised an expense of £4.6m (2021/22: £3.4m), related to all equity-settled share-based payment transactions.

24. Dividends
The following dividends were declared and paid during the period:

Ordinary final of 1.2 pence per ordinary share (2021/22: 1.0 pence)

52 weeks
ended
1 April 2023
£m

10.3

52 weeks
ended
2 April 2022
£m

8.5

After the balance sheet date, a final dividend for 2022/23 of 1.44 pence per qualifying ordinary share (2021/22: 1.2 pence) was proposed
for approval at the Annual General Meeting on 20 July 2023 and will be payable on 28 July 2023. Dividend distributions are recognised as a
liability in the period in which the dividends are approved by Group’s shareholders.

167

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

25. Capital commitments
The Group has capital expenditure on property, plant and equipment contracted for at the end of the reporting period but not yet incurred
at 1 April 2023 of £8.9m (2021/22: £5.7m).

26. Contingencies
There were no material contingent liabilities at 1 April 2023 (2021/22: none).

27. Related party transactions
The following transactions were carried out with related parties:

27.1 Key management compensation
Key management personnel of the Group are considered to be the executive and non-executive directors and the Executive Leadership
Team. Details of their remuneration are set out below in aggregate for each of the categories specified in IAS 24 ‘Related Party Disclosures’.
Further information about the remuneration of individual directors is provided in the audited section of the Directors’ Remuneration Report
on pages 90 to 114.

Short-term employee benefits
Share-based payments
Total

52 weeks
ended
1 April 2023
£m

52 weeks
ended
2 April 2022
£m

5.8
3.9
9.7

5.5
3.2
8.7

27.2 Other related parties
As at 2 April 2022 the following are also considered to be related parties under the Listing Rules and IAS 24 due to their shareholdings
exceeding 10% of the Group’s total issued share capital:

• Nissin Foods Holding Co., Ltd. (‘Nissin’) is considered to be a related party by virtue of its 24.86% (2021/22: 19.06%) equity shareholding

in Premier Foods plc and its right to appoint a member to the Board of directors.

Transactions with related parties

Sale of services:
– Nissin
Total sales
Purchase of goods:
– Nissin
Total purchases

53 weeks
ended
1 April 2023
£m

53 weeks
ended
2 April 2022
£m

0.2
0.2

26.1
26.1

0.2
0.2

18.7
18.7

27.3 Retirement benefit obligations
As stated in note 14, the Group has entered into an arrangement with the Pension Scheme Trustees as part of the funding requirements for
any actuarial deficit in the Scheme. Full details of this arrangement are set out in note 14 to these financial statements.

28. Acquisition of subsidiary
On 31 August 2022, the Group acquired 100% of the ordinary share capital of The Spice Tailor Limited (‘Spice Tailor’) and its wholly
owned subsidiaries, The Spice Tailor (Direct) Limited, The Spice Tailor (Canada) Limited and The Spice Tailor (Australia) Pty Ltd for initial
consideration of £43.8m (this comprises £44.5m cash consideration less £0.7m cash acquired). Additional consideration is dependent on
future performance with an earn out structure over a three year period from FY2024, subject to further growth targets with a maximum
cap of total consideration of £72.5m. The acquisition is well aligned to the Group’s growth strategy, being highly complementary to the
Group’s Sharwood's and Loyd Grossman brands and having a strong geographical fit, with a presence in the UK, Australian, Canadian and
Irish markets, significantly expanding the Group’s ethnic foods business in Australia.

168

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023The following table summarises the Group’s provisional assessment of the consideration for Spice Tailor, and the amounts of the assets
acquired and liabilities assumed.

Recognised amounts of identifiable assets acquired and liabilities assumed
Property, plant & equipment
Brands and other intangible assets
Inventories
Trade and other receivables1
Trade and other payables
Provisions
Cash and cash equivalents
Deferred tax liability
Total identifiable net assets

Goodwill on acquisition

Initial consideration transferred in cash
Deferred contingent consideration
Total consideration

IFRS book
value at
acquisition
£m
0.1
–
3.0
2.4
(3.4)
(0.1)
0.7
–
2.7

Fair value
adjustments
£m
–
20.5
0.2
2.4
–
(2.4)
–
(5.0)
15.7

Fair value
£m
0.1
20.5
3.2
4.8
(3.4)
(2.5)
0.7
(5.0)
18.4

34.3

44.5
8.2
52.7

1 Fair value adjustment relates to the recognition of indemnification assets in relation to contingent liabilities acquired

Identifiable net assets
The fair values of the identifiable assets and liabilities acquired have been determined provisionally at the acquisition date. As permitted
under IFRS 3 the Group may, within twelve months of the acquisition date, retrospectively adjust the provisional amounts recognised to
reflect new information obtained about facts and circumstances that existed and, if known, would have affected the measurement of the
amounts recognised as at the acquisition date.

As a result of the business combination, the Group recognised provisions of £2.5m, including £2.4m in relation to the fair value of
contingent liabilities acquired which relate primarily to future tax liabilities in line with IAS 37.

The fair value of the trade and other receivables acquired as part of the business combination was £4.8m. This includes an indemnification
asset of £2.4m in relation to the contingent liabilities assumed, and trade receivables amounting to £2.4m which approximated to the
contractual cash flows.

Consideration transferred
Consideration included cash of £44.5m transferred on completion of the acquisition. An additional £8.2m was recognised in relation to
the fair value of deferred contingent consideration which is dependent on future performance with an earn out structure over a three
year period from FY2024, subject to further growth targets. The deferred contingent consideration is included within non-current other
liabilities.

The fair value of deferred contingent consideration represents the present value of estimate payments measured at the time of acquisition
based on the Group’s estimate of future performance. The fair value is based on unobservable inputs and is a classified as a level 3 fair
value estimate under the IFRS fair value hierarchy. See note 19 for further details.

Acquisition-related costs amounting to £2.7m are not included as part of consideration transferred and have been recognised as an expense
in the consolidated statement of profit or loss, as part of administrative expenses.

Goodwill
Goodwill amounting to £34.3m was recognised on acquisition and while The Spice Tailor brand forms much of the enterprise value of the
business, there is a premium associated to the purchase of a pre-existing, well positioned business. This goodwill is not expected to be
deductible for tax purposes and is allocated to the Group’s Grocery CGU.

Spice Tailor contribution to the Group results
From the date of the acquisition to 1 April 2023, Spice Tailor contributed £10.0m to the Group’s Revenues and a profit before taxation of
£0.3m. Had the acquisition occurred on 3 April 2022, on a pro forma basis, the Group’s Revenue for the period to 1 April 2023 would have
been £1,013.4m and profit before taxation for the same period would have been £111.5m.

169

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the consolidated financial statements

CONTINUED

29. Investments
In accordance with Section 409 of the Companies Act 2006 and The Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, as amended by The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015, a full list
of subsidiary undertakings, associate undertakings and joint operations (showing the country of incorporation, registered address and
effective percentage of equity shares held) as at 1 April 2023 is disclosed below.

Company
Premier Foods Investments Limited
PFI No.1 Old Co Limited
Premier Foods Finance plc
Premier Foods Group Services Limited
Premier Foods Group Limited
Centura Foods Limited
Premier Foods (Holdings) Limited
H.L. Foods Limited
Hillsdown Europe Limited
CH Old Co Limited*
Hillsdown International Limited
RHM Frozen Foods Limited
Knighton Foods Limited
Knighton Foods Properties Limited

Company
The Spice Tailor Limited

The Spice Tailor (Direct) Limited
W & J B Eastwood Limited**

Vic Hallam Holdings Limited**
DFL Oldco Limited**
F.M.C. (Meat) Limited**
Haywards Foods Limited**
RLP Old Co Limited**
Hillsdown Holdings Pension Trustees Limited*
Premier Foods Group Life Plan Trustees
Limited*
RHM Pension Trust Limited*
The Specialist Soup Company Limited**
James Robertson & Sons Limited**
00241018 Limited (formerly British Bakeries)**
Daltonmoor Limited**
PFF Old Co Limited**
RFB Old Co Limited**
PIFUK Old Co Limited
RH Oldco Limited*
Citadel Insurance Company Limited

% Held
by Parent
Company of
the Group
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%

% Held
by Parent
Company of
the Group
0%

0%
0%

0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%

0%
0%
0%

170

Country

Registered Address

England &
Wales

Premier House
Griffiths Way
St Albans
Hertfordshire
AL1 2RE

% Held
by Group
companies, if
different

Share Class
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £0.01 Ordinary shares
100% £0.25 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares

% Held
by Group
companies, if
different

Share Class

Country

Registered Address
Premier House
Griffiths Way
St Albans
Hertfordshire
AL1 2RE

100% £0.001 Ordinary shares
£0.001 B shares
£0.001 C shares
£0.001 D shares

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

100% £0.01 Ordinary shares
100% £1.00 Ordinary A shares
£1.00 Ordinary B shares
£0.25 Ordinary shares
£1.00 redeemable cumulative
preference shares
£1.00 Ordinary shares
£0.25 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary shares
100% £1.00 Ordinary Shares

England &
Wales

Isle of Man

Ioma House
Hope Street
Douglas
Isle of Man
IM1 1AP

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Company
Woolgate Nitrovit Limited**

% Held
by Parent
Company of
the Group
0%

% Held
by Group
companies, if
different

Share Class
100% £0.25 Ordinary shares

Country
England &
Wales

Diamond Foods Lebensmittelhandel GmbH

Premier Brands Limited*
Beatties Northern Limited (SC018898)**

0%
0%

100% €0.5113 Ordinary shares

Germany

100%
100%

£1.00 Ordinary shares
£1.00 Ordinary shares

Scotland

Premier Foods, Inc.

100% US$0.01 Common Stock

United States

Premier Foods ROI Limited
Premier Foods Ireland Manufacturing Limited*

G P Woolgate Limited**

*Dormant entities

**Restored companies

0%
0%

100%
100%

€1.00 Ordinary shares
€1.26 Ordinary shares

Ireland

100% £1.00 Ordinary shares

England &
Wales

Registered Address
2 Woolgate Court St
Benedicts Street
Norwich
Norfolk
NR2 4AP
Gärtnerstraße 3, 25485
Hemdingen, Germany
Summit House
4-5 Mitchell Street
Edinburgh
Scotland
EH6 7BD
The Corporation Trust
Company
Corporation Trust
Centre
1209 Orange Street,
Wilmington
DE 19801, USA
25-28 North Wall Quay
Dublin 1
Ireland
PWC LLP, Benson
House 33 Wellington
Street, Leeds, LS1 4JP

30. Subsequent events
On 11 May 2023 the Group extended £148.5m of its revolving credit facility (RCF) by one year to May 2026. The covenant package attached
to the RCF is to be tested bi-annually and they are unchanged (see note 20 for details).

On 18 May 2023, the directors have proposed a final dividend for the period ended 1 April 2023 for approval at the Annual General
Meeting. See note 24 for more details.

171

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCECompany balance sheet

Non-current assets

Investments in Group undertakings
Trade and other receivables
Deferred tax assets1

Current assets

Trade and other receivables
Cash and cash equivalents

Total assets

Trade and other creditors

Net current assets
Total assets less current liabilities
Net assets

Equity

Called up share capital
Share premium account
Retained earnings2

Total equity

As at
1 April 2023
£m

As at
2 April 2022
£m

Note

4
5
6

1,117.8
49.5
1.5
1,168.8

12.5
0.2
1,181.5
(3.1)
9.6
1,178.4
1,178.4

86.8
2.5
1,089.1
1,178.4

1,114.8
17.0
1.3
1,133.1

10.7
1.2
1,145.0
(1.4)
10.5
1,143.6
1,143.6

86.3
1.5
1,055.8
1,143.6

1 The prior year deferred tax asset has been re-presented from Current to Non-current in line with IAS 1.

2 The company has taken advantage of the exemption permitted by Section 408 of the Companies Act 2006 not to publish its individual profit and loss account and related notes.

During the period, the company made a profit of £41.6m (2021/22: £1.0m loss).

The notes on pages 174 to 177 form an integral part of the financial statements.

The financial statements on pages 172 to 177 were approved by the Board of directors on 18 May 2023 and signed on its behalf by:

Alex Whitehouse
Chief Executive Officer

Duncan Leggett
Chief Financial Officer

172

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023

Company statement of changes in equity

At 4 April 2021
Loss for the period
Share-based payments
Purchase of shares to satisfy share awards
Shares issued
Dividends
Deferred tax movements on share-based payments
At 2 April 2022

At 3 April 2022
Profit for the period
Share-based payments
Purchase of shares to satisfy share awards
Shares issued
Dividends
Deferred tax movements on share-based payments
At 1 April 2023

Called up
share capital
£m
85.5
–
–
–
0.8
–
–
86.3

86.3
–
–
–
0.5
–
–
86.8

Share
premium
account
£m
0.6
–
–
–
0.9
–
–
1.5

1.5
–
–
–
1.0
–
–
2.5

Retained
earnings
£m
1,062.1
(1.0)
3.4
(0.4)
–
(8.5)
0.2
1,055.8

1,055.8
41.6
4.6
(2.5)
–
(10.3)
(0.1)
1,089.1

Total
£m
1,148.2
(1.0)
3.4
(0.4)
1.7
(8.5)
0.2
1,143.6

1,143.6
41.6
4.6
(2.5)
1.5
(10.3)
(0.1)
1,178.4

The Company has considered the profits available for distribution to shareholders. At 1 April 2023, the Company had retained earnings
of £1.1bn (2021/22: £1.1bn) of which the unrealised profit element was £0.5bn (2021/22: £0.5bn). The Company had profits available
for distribution of £0.6bn (2021/22: £0.6bn) for the payment of dividends or purchases of own shares. Determining the Company’s
reserves available for distribution is complex and requires, in some instances, the application of judgement. The Company has determined
what is realised and unrealised in accordance with the Companies Act 2006 and the guidance included in ICAEW Technical Release TECH
02/17BL ‘Guidance on realised and distributable profits under the Companies Act 2006’. The Company’s reserves available for distribution
include adjustments to retained earnings in respect of the unrealised portion of dividends in specie received by the Company, profit on
intercompany interest received from subsidiaries, post employment benefit surpluses and share-based payment charges capitalised to
investments.

The notes on pages 174 to 177 form an integral part of the financial statements.

173

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCE
Notes to the Company financial statements

1. Accounting policies
Basis of preparation
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’).

These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”).
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted
international accounting standards (“Adopted IFRSs”), but makes amendments where necessary in order to comply with Companies Act
2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.

• Cash flow statements and related notes

• Presentation of comparative period reconciliations

• Share-based payments

• Financial instruments and capital management

• Standards not yet effective

• Disclosures in respect of compensation of key management personnel

• Certain disclosures regarding revenue

• Certain disclosures regarding leases

The profit for the period of £41.6m (2021/22: £1.0m loss) is recorded in the accounts of Premier Foods plc, which includes dividend income
of £45.0m (2021/22: £nil).

The Company has ensured that its assets and liabilities are measured in compliance with FRS 101. The financial statements have been
prepared under the historical cost convention.

The preparation of the financial statements requires the directors to make estimates and assumptions that affect the reported amounts of
assets and liabilities, and the disclosure of contingent liabilities at the date of the financial statements. The key estimates and assumptions
are set out in the accounting policies below, together with the related notes to the accounts.

The directors consider that the accounting policies set out below are the most appropriate and have been consistently applied.

The Company is exempt as permitted under Financial Reporting Standard 101 from disclosing related party transactions with entities that
are wholly owned subsidiaries of the Premier Foods plc Group.

Investments
Investments are stated at cost less any provision for impairment in their value.

Impairment of non-financial assets (including investments)
The carrying amounts of the Company’s non-financial assets, including investments in subsidiaries, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.

An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount. Impairment losses are
recognised in the statement of profit or loss in the period in which they occur.

Taxation
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the profit and loss account except to the
extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity
or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
temporary difference can be utilised.

174

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Share-based payments
The Company operates a number of equity-settled share-based compensation plans. The fair value of employee share option plans
is calculated using an option valuation model, taking into account the terms and conditions upon which the awards were granted. In
accordance with International Financial Reporting Standard 2, Share-Based Payment (‘IFRS 2’), the resulting expense is charged to the profit
and loss account over the vesting period of the options for employees employed by the Parent Company, or treated as an investment in
subsidiaries in respect of employees employed by the subsidiaries where the expense is recharged. The value of the charge is adjusted to
reflect expected and actual levels of options vesting.

The total amount to be expensed over the vesting period is determined by reference to the fair value of the share awards/options granted,
excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting
conditions are included in assumptions about the number of share awards/options that are expected to vest. At each balance sheet date,
the Company revises its estimates of the number of share awards/options that are expected to vest and recognises the impact of the
revision to original estimates, if any, in profit and loss or investment in subsidiaries, with a corresponding adjustment to equity.

Dividends
Dividend distributions to shareholders are recognised as a liability in the Group’s financial statements in the period in which the dividends
are approved by the shareholders, and for interim dividends in the period in which they are paid. Dividend distributions are recognised as a
liability in the period in which the dividends are approved by Company’s shareholders.

2. Significant estimate
Investment in Group undertakings
Impairment reviews in respect of investments in Group undertakings are performed at least annually and more regularly if there is an
indicator of impairment. The carrying amounts of the Company’s non-financial assets, including investments in subsidiaries, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.

3. Operating profit/(loss)
Audit fees in respect of the Company are £nil (2021/22: £nil). Note 5.2 of the consolidated financial statements provides details of the
remuneration of the Company’s auditor on a Group basis.

At 1 April 2023, the Company had two employees (2021/22: two). Directors’ emolument disclosures are provided in the Single Figure Table
on page 101 of this annual report.

4. Investments in Group undertakings

Cost
At 3 April 2022/4 April 2021
Additions
At 1 April 2023/2 April 2022
Accumulated impairment
At 3 April 2022/4 April 2021
At 1 April 2023/2 April 2022
NBV at 1 April 2023/2 April 2022

2022/23
£m

2,874.1
3.0
2,877.1

(1,759.3)
(1,759.3)
1,117.8

2021/22
£m

2,871.8
2.3
2,874.1

(1,759.3)
(1,759.3)
1,114.8

In 2022/23 a capital contribution of £3.0m (2021/22: £2.3m) was given in the form of share incentive awards to employees of subsidiary
companies which were reflected as an increase in investments.

During 2021/22 as part of a Group-wide reorganisation, the Company’s direct subsidiary, Premier Foods Investment No.1 Limited
transferred its investment in Premier Foods Investment Limited to the Company. Following the transfer the Company allocated the value
from Premier Foods Investment No.1 Limited to Premier Foods Investment Limited. There was no change to the value of investments held
by the Company as a result of this transaction.

Refer to note 29 of the consolidated financial statements for a full list of the undertakings.

175

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCENotes to the Company financial statements

CONTINUED

4. Investments in Group undertakings CONTINUED
Impairment testing for the period ended 1 April 2023 has identified that the value in use of the investment in Premier Foods Investments
Limited of £1.8bn is sensitive to reasonably possible changes in assumptions as set out in the table below.

The key assumptions used in the impairment test which include long-term growth rates and discount rates are the same as that used for the
Grocery CGU described further in note 12 of the consolidated financial statements. An illustration of the reasonably possible changes in key
assumptions in the impairment test for the investment in Premier Foods Investments Limited are as follows:

Revenue growth
Divisional contribution margin
Long-term growth rate
Discount rate

Reasonably possible change in assumption
Increase/decrease by 3.0%
Increase/decrease by 2.0%
Increase/decrease by 0.5%
Increase/decrease by 0.5%

Impact on headroom
Increase/decrease by £413.1m/£370.5m
Increase/decrease by £283.0m
Increase/decrease by £93.6m/£82.4m
Decrease/increase by £107.0m/£121.4m

Under each of the above sensitivities no individual scenarios would trigger an impairment for the Group CGU. Under a combination of
reasonably possible scenarios and taking into account mitigating actions, no impairment would be triggered.

5. Debtors

Amounts due after less than one year

Amounts owed by Group undertakings
IFRS 9 ECL provision
Total debtors

The amounts owed by Group undertakings are repayable on demand, unsecured and interest free.

Amounts due after more than one year

Amounts owed by Group undertakings
IFRS 9 ECL provision
Total debtors

As at
1 April 2023
£m

As at
2 April 2022
£m

12.5
(0.0)
12.5

10.7
(0.0)
10.7

As at
1 April 2023
£m

As at
2 April 2022
£m

49.6
(0.1)
49.5

17.1
(0.1)
17.0

The amounts owed by Group undertakings are repayable on demand, unsecured and interest free. However, there is no intent or
expectation to settle within 12 months.

6. Deferred tax

At 3 April 2022/4 April 2021
Credited to the statement of profit and loss
(Charged) / Credited to equity
At 1 April 2023/2 April 2022

The deferred tax asset relates to share-based payments.

7. Creditors: amounts falling due within one year

Amounts owed to Group undertakings
Other payables
Total creditors

2022/23
£m

2021/22
£m

1.3
0.3
(0.1)
1.5

0.8
0.3
0.2
1.3

As at
1 April 2023
£m

As at
2 April 2022
£m

(2.3)
(0.8)
(3.1)

–
(1.4)
(1.4)

The amounts owed to Group undertakings are repayable on demand, unsecured and interest free.

The losses surrendered as Group Relief between UK members of the Group have been surrendered for no consideration.

176

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023
8. Called up share capital and other reserves
a) Called up share capital

Authorised, issued and fully paid
868,098,210 (2021/22: 862,785,277) ordinary shares of 10 pence each

As at
1 April 2023
£m

As at
2 April 2022
£m

86.8

86.3

All of the ordinary shares rank equally with respect to voting rights and the rights to receive dividends and distributions on a winding up.

b) Share-based payments
The costs reflect the Company’s share option schemes in operation. Further details are available in note 23 of the consolidated financial
statements.

The charge relating to employees of the Company amounted to £1.6m (2021/22: £1.1m). Further details of these schemes can be found in
the Directors’ Remuneration Report on page 90 to 114.

9. Dividends
The following dividends were declared and paid during the period:

Ordinary final of 1.2 pence per ordinary share (2021/22: 1.0 pence)

52 weeks
ended
1 April 2023
£m

10.3

52 weeks
ended
2 April 2022
£m

8.5

On 18 May 2023, the directors have proposed a final dividend of 1.44p per share for the period ended 1 April 2023 subject to the
ratification at the AGM by the shareholders. Dividend distributions are recognised as a liability in the period in which the dividends are
approved by Company’s shareholders.

10. Subsequent events
On 11 May 2023 the Group extended £148.5m of its revolving credit facility (RCF) by one year to May 2026. The covenant package attached
to the RCF is to be tested bi-annually and they are unchanged (see note 20 of the consolidated financial statements for details).

On 18 May 2023, the directors have proposed a final dividend for the period ended 1 April 2023 for approval at the Annual General
Meeting. See note 24 of the consolidated financial statements for more details.

177

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCEEnriching Life Plan disclosure tables

We will annually disclose information to demonstrate our progress against our
Enriching Life Plan, and other key Environmental, Social and Governance measures.
All targets are for 2030 against a 2020 baseline, unless otherwise
stated. Several of these measures are newly developed and will
evolve with improvements in available data and information from
suppliers and other parties. In some areas, information from prior
years may be updated if better information, subsequently, becomes
available and changes prior year disclosures by more than 5%, or
where it makes a meaningful difference to the interpretation of
performance. More information is available in the accompanying
notes following the tables.

with the International Standard on Assurance Engagements 3000
(Revised) ‘Assurance Engagements other than Audits or Reviews
of Historical Financial Information’ and International Standard
on Assurance Engagements 3410 ‘Assurance engagements on
greenhouse gas statements’, issued by the International Auditing
and Assurance Standards Board. The Independent Limited
Assurance Report can be found at www.premierfoods.co.uk/
SpecialPages/ESG-Disclosure-Assurance-Report. Our Methodology
Statement – the basis on which the KPIs are calculated and on which
the limited assurance is given - can be found at www.premierfoods.
co.uk/CorporateSite/media/documents/sustainability/Premier-
Foods-reporting-criteria-for-specified-ESG-performance-
metrics-2022-23.pdf.

Independent assurance
Pricewaterhouse Coopers LLP (‘PwC’) have performed an
Independent Limited Assurance engagement on selected balances
within the 2022/23 data, shown with the symbol A , in accordance

Our Products

Commitment

Measure

Comments

Make great-tasting, healthier and more nutritious food

Baseline
(2020/21 unless
otherwise stated) 2021/22 2022/23

More than double
sales of products that
meet high nutritional
standards
More than 50% of our
products will provide
additional health or
nutrition benefits

Total company branded sales, in £m,
of foods scoring less than 4, and drinks
scoring less than 1, on the UK Department
of Health’s Nutrient Profiling Model.

Proportion of products with a health or
nutrition benefit

Support the nation’s shift to plant-based diets

Grow sales of plant-
based products to
£250m. p.a.

Value of sales of plant-based products

Each core category has
plant-based offering 1

Number of core categories with a plant-
based/meat or dairy free offering

www.gov.uk/government/publications/the-
nutrient-profiling-model

£320m

£286m £335m A

Defined as products that qualify for a regulated
health or nutritional claim calculated at a Stock
Keeping Unit (SKU) level.

38%

40%

43%

Total company branded sales, in £m of products
made to a vegan recipe. They do not, by design,
contain meat, dairy, eggs or other animal products,
and all principal ingredients are plant based.

Core categories are those strategic growth
categories where our product ranges constitute
at least 10% of the revenue of total category.
2020/21 and 2021/22 data restated. See
footnote 1.

£157m

£149m

£199m

53%
(8/15)

60%
(9/15)

80%
(12/15)

Reduce the environmental impact of our packaging

100% of packaging to
be reusable, recyclable
or compostable by
20252

Percentage of total packaging (by weight),
which meets the On-Pack Recycling
Labelling Scheme (OPRL) Recycled
Categories

Primary, secondary and tertiary packaging,
which is recyclable either at kerbside, recycling
points or front of store using latest OPRL
definitions. Based on tonnage. www.oprl.org.uk/

Percentage of plastic packaging (by
weight), which meets the On-Pack
Recycling Labelling Scheme (OPRL)
Recycled Categories

Total packaging weight (tonnes)

Percentage of plastic consumer packaging, which
is recyclable either at kerbside, recycling points
or front of store using latest OPRL definitions.
Based on tonnage.

Our target to reduce the carbon impact of our
packaging has been incorporated into our scope
3 reporting.

Reduce carbon impact
of our packaging in line
with our agreed climate
commitments

94%

96%

70%

80%

82%

76,025

67,273

56,806

1 We have reviewed the definition of core categories and 2020/21 and 2021/22 data has been restated.

2 Packaging data covers branded and own brand packaging from the prior calendar year to align with the UK Plastics Pact reporting requirements.

178

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Our Planet

Commitment

Measure

Comments

Take action on climate change

Baseline
(2020/21 unless
otherwise stated) 2021/22

2022/23

Validated by the
SBTI in May 2023

Develop validated
science-based targets
aligned with ‘Business
Ambition for 1.5’

Reduce scope 1 and 2
emissions by 67% by
2030 and achieve net
zero by 2040 3

Targets submitted to, and approved by, the
Science Based Targets initiative (SBTi)

Premier Foods commits to reduce absolute
scope 1 and 2 GHG emissions 66.8% by FY2030
from a FY2021 base year. Premier Foods also
commits to reduce absolute scope 3 GHG
emissions from purchased goods and services
25% within the same timeframe.

Scope 1 Greenhouse Gas Emissions (tCO2e)

39,113

37,621

36,668 A

Scope 2 Greenhouse Gas Emissions – location
based (tCO2e) 3
Scope 2 Greenhouse Gas Emissions – net
market based (tCO2e) 3

Total Scope 1 & 2 Greenhouse Gas Emissions
– location based (tCO2e) 3
Reduction in Scope 1 & 2 Emissions since
2020/21 – location based (%) 3

Total Scope 1 & 2 emissions net market based
(tCO2e) 3
Reduction in Scope 1 & 2 Emissions since
2020/21 – net market based (%) 3
Overall Scope 1 & 2 intensity (g of CO2 e per
KG of produced product) – gross location
based 3

Overall Scope 1 & 2 intensity (g of CO2 e per
KG of produced product) – net market based 3

Total Energy Usage (MWh)

Energy use ratio (MWh/tonnes)

We have strengthened our target for the full
adoption of renewable electricity by 2030
and developed a new strategy to ensure a
sustainable transition. We have purchased
renewable electricity in the form of Renewable
Energy Guarantees of Origin certificates, but
are reducing our reliance on short-term market
mechanisms as we focus on investments in on-
site generation and Power Purchase Agreements
to drive the development of new infrastructure.
2020/21 and 2021/22 data restated. See
footnote 3.

Improvements made in total emissions, although
reduction not in line with reduced volumes
due to product mix and non-volume-related
energy usage.

Improvements made in energy usage, although
reduction not in line with reduced volumes
due to product mix and non-volume-related
energy usage.

This is the energy consumption underlying the
scope 1 Greenhouse Gas emissions and scope
2 Greenhouse Gas emissions – location based,
using the same activity data (excluding fugitive
emissions data).

21,247

18,567

15,081 A

33,801

227

28,961

60,359

56,188

51,749 A

(6.9%)

(14.3%)

72,913

37,848

65,629

(48.1%)

(10.0%)

164.0

168.6

169.4

198.1

113.6

214.9

286,883

275,577

259,555 A

0.78

0.83

0.85

Reduce scope 3
emissions by 25% by
2030 and target net
zero by 2050

Total Scope 3 Greenhouse Gas emissions
(tCO2e) 4

Reported using the GHG Protocol
https://ghgprotocol.org/

918,926

983,117

905,495

2020/21 and 2021/22 data restated. See
footnote 4.

Purchased goods and services (tCO2e)
Upstream transport and distribution (tCO2e)
Downstream transport and distribution (tCO2e)
Other relevant scope 3 emissions (tCO2e) 4

Carbon Disclosure Project (CDP) Climate
Change Benchmark

www.cdp.net/en

807,319

34,960

6,930

56,286
C

179

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCEEnriching Life Plan disclosure tables

CONTINUED

Our Planet

Commitment

Measure

Comments

Protect our natural resources

Deforestation free and
conversion free palm and
beef supply chain by 2025 5

Proportion of palm purchased that is
RSPO certified

rspo.org/

Percentage of palm products directly
purchased which are RSPO certified
(segregated supply)

Percentage of palm directly purchased
which is RSPO certified (mass balance)

Carbon Disclosure Project (CDP) Forest
Benchmark - Palm

www.cdp.net/en

Percentage of beef products directly
and indirectly purchased which are
from low risk origins or certified
deforestation free

Baseline
(2020/21 unless
otherwise stated)

2021/22

2022/23

100%

57%

54%

67%

43%

46%

33%

86%

90%

93%

Carbon Disclosure Project (CDP) Forest
Benchmark Cattle Products

www.cdp.net/en

Deforestation free and
conversion free across
supply chain by 2030 5

Percentage of soy products directly
purchased which are from a low risk
origin or certified

responsiblesoy.org/

100%

Percentage of soy sourced through
certified credit schemes where
purchased as part of an ingredient

We are in the process of
purchasing certified credits
to cover 100% of the soy
used within our ingredients in
2022/23.

Percentage of soy sourced through
certified credit schemes where used as
feed in animal farming for products in
our supply chain.

Percentage of paper and board
purchased directly which are from low
risk origins or PEFC or FSC certified

Percentage of sugar purchased directly
which are from areas of low risk origin
or are deforestation free certified

Percentage of cocoa powder and
chocolate directly purchased, which is
mass balance certified or verified 6

With the adoption of Rain Forest
Alliance certification for all
directly purchased cocoa powder
and chocolate, we expect this
percentage to be close to 100%
by the end of 2023.

Carbon Disclosure Project (CDP) Forest
Benchmark Soy Products

www.cdp.net/en

Champion regenerative
agricultural practices for
key ingredients

Percentage of key suppliers in critical
ingredients categories supporting
sustainable agricultural practices and
initiatives6, 7

Critical categories include dairy,
wheat and flour, sugar beet and
cane, potato, apple, tomato,
maize, rice, oils and onion.

180

100%

93%

89%

96%

47%

23%

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Our Planet

Commitment

Measure

Comments

Baseline
(2020/21 unless
otherwise stated)

2021/22

2022/23

Reduce waste across our value chain

Halve our food waste 8

Total food waste (tonnes)

Using Champions 12.3
methodology

8,012

7,609

6,803

Reduction versus 2017 8

(5.0%)

(15.1%)

Total food waste (%age of production) 8

2.4%

2.2%

2.1%

Reduction versus 2017 8

Support our suppliers in
halving their food waste

Percentage of key ingredients and
finished goods suppliers with targets
aligned to halving food waste by 2030 6 7

Food waste redistributed for human
consumption (tonnes)

Make better use of any
food waste we do generate
and redistribute 750t for
human consumption

Use the strength of our
brands to engage shoppers
and consumers to reduce
food waste in the home

Suppliers with no material
impact on food waste (i.e.
packaging) are excluded from
this measure.

Food redistributed to
organisations that make
it available for human
consumption.

Number of brand-led initiatives
to encourage shoppers and
consumers to reduce food waste
in the home.

Other key environmental and supply chain measures

(7.5%)

(12.5%)

35%

306

750

1,554

Total production (tonnes)

Total water withdrawn (m3)

All incoming water including
abstraction (groundwater
and surface water) and mains
derived.

Water usage ratio for produced volume
(m3/tonne)

Carbon Disclosure Project (CDP) Water
Benchmark

www.cdp.net/en

Number of operational sites with ISO
14001 certification

367,992

333,260

305,449

776,026

720,749

708,774

2.11

2.16

2.32

8/8

9/9

3 All disclosures follow the Greenhouse Gas protocol and the reporting criteria used can be found on our website www.premierfoods.co.uk/CorporateSite/media/documents/
sustainability/Premier-Foods-reporting-criteria-for-specified-ESG-performance-metrics-2022-23.pdf . Based on improved usage data and emissions factors from suppliers we
have updated our Scope 2 Greenhouse Gas emissions – net market based data in both stated prior years.

4 2022/23 Scope 3 emissions data covers the 2022 calendar year. Includes: capital goods, fuel and energy-related activities, waste generated in operations, business travel,

employee commuting, and the end-of-life treatment of sold products (packaging). The approach for calculating the emissions associated with ingredients, purchased finished
goods, transport and packaging have all been strengthened and prior year data has been restated. Premier Food purchased The Spice Tailor in summer 2022. Activity associated
with The Spice Tailor products is not included in the 2022/23 scope 3 emissions data. It will be included in future disclosures.

5 Our targets for zero deforestation and conversion-free supply chain have been updated to deforestation free and conversion-free supply chain to align with more widely used

definitions.

6 New measure and data is not available for prior years.

7 Key suppliers are our 64 most impactful suppliers based on greenhouse gas emissions and other environmental impacts.

8 Food waste reporting is aligned with the Champions 12.3 and UK Food Reduction Roadmap and, therefore, covers prior calendar year. Baseline year is 2017.

181

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCEEnriching Life Plan disclosure tables

CONTINUED

Our People

Commitment

Measure

Comments

Create a diverse, healthy and inclusive culture

Gender balance in our
senior leadership team 9

Percentage of senior management
roles which are held by females

Percentage of general management
roles which are held by females

Percentage of total colleagues that
are females

Mean gender pay gap (hourly)

Mean gender pay gap (bonus)

Our Diversity will reflect
regional demographics

Percentage of employees who are
non-white vs national average.

Percentage of employees who are
self identifying as LGBTQ+ vs national
average.

All sites will achieve
platinum level Health &
Well-being accreditation

Number of sites achieving an external
Health & Well-being accreditation

Senior management is
considered to be our Executive
Leadership Team and their direct
reports.

General management roles are
all graded roles (grades 0-5;
these employees all have access
to the Management Bonus
Scheme)

www.premierfoods.co.uk/
CorporateSite/media/
documents/sustainability/
behaviour%20policies/Gender-
Pay-Gap-2022.pdf

Our hourly pay position has
improved, although bonus gap is
a result of the number of males
we have in senior roles.

Compared against a UK working
population of people from
a non-white backgrounds
of 12.5%, according to the
McGregor-Smith Review 2017.

Compared against figures from
the Office of National Statistics
2017 stating that 4.6% of the UK
population reports to be part of
the LGBTQ+ community.

Accreditation programme
started in 2022/23 with phased
roll-out over the coming years.

Baseline
(2020/21 unless
otherwise stated)

2021/22

2022/23

28.0%

37.0%

40.4% A

43.5%

46.0%

46.9% A

36.7%

37.3%

36.7%

8.4%

6.8%

5.6%

37.8%

13.6%

40.5%

10.6%

14.4%

14.2%

4.2%

4.8%

182

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023Our People

Commitment

Measure

Comments

Be a leading developer of people in the Food & Drink industry

Baseline
(2020/21 unless
otherwise stated)

2021/22

2022/23

We will provide skills
programmes and work
opportunities for the young
and excluded groups to
enable a fulfilling career in
the Food Industry

Support employees to
develop key skills with 75%
of science, technology,
engineering and maths
(STEM) vacancies filled by
internal candidates

Number of apprenticeships

Total number of employees
participating in an
apprenticeship programme.

Number of partnerships with groups
who can help us support the young
and excluded groups into employment

Percentage of STEM vacancies filled
by internal candidates

Number of partnerships with
local schools, colleges, charities
or social enterprises developing
employability skills

Percentage of all roles that
require STEM skills, which are
filled by internal candidates,
apart from first entry level.

30%

39%

Number of T-level placements

Number of STEM apprenticeships

80% of colleagues will feel
they have opportunity to
develop and grow

Percentage of colleagues stating that
they feel they have opportunities to
develop and grow

Other key employee measures

Lost time accidents (LTA) per 100,000
hours worked

RIDDOR (reporting of Injuries,
diseases and dangerous occurrences
regulations) per 100,000
hours worked

First T-level placements started
in autumn 2022.

Number of apprenticeships in
roles requiring STEM skills.

Results from biannual colleague
survey, next due in 2024.

53%

n/a

0.10

0.02

0.16

0.14

0.12

0.09

Be a caring community partner

We will provide 1 million
meals equivalent each year
to those in food poverty
Be more of a force for good
in our communities by
volunteering at least 1,000
colleague days each year

Number of meals provided to charities Data includes direct product and

593,859

616,772

726,530

financial donations. 10

Number of days volunteered by
colleagues to charities or registered
good causes

1 day is at least 8 hours of
employee time from their paid
hours. 6

Total Community Investment
contribution value (in £000)

Includes all direct and leveraged
contributions, including
financial, in-kind, donations and
volunteering.

212

270

£841.2

£901.5

£1,239.5

9 Senior management is considered to be our Executive Leadership Team and their direct reports. We would like to reach a position where females make up between 45% and

55% reflecting that it is a relatively small team and, therefore, percentage measures can be impacted by short-term fluctuations in individual roles. This approach also recognises
that some individuals do not identify with traditional binary gender definitions.

10 Data includes direct product and financial donations to programmes supporting food redistribution to those in food poverty and food insecurity. 1 meal = 420g for product

donations, as per guidance from WRAP, and £0.25 for financial donations, as per guidance from FareShare.

183

Premier Foods plcwww.premierfoods.co.ukSTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEWGOVERNANCEAdditional information

Shareholder enquiries
The Company’s Register of Members
is maintained by our registrar, Equiniti.
Shareholders with queries relating to
their shareholding should contact Equiniti
directly using the details given below:

Equiniti, Aspect House, Spencer Road,
Lancing BN99 6DA.

Telephone – 0371 384 2030
(or +44 371 384 2030), if calling from
outside the UK). Calls to this number are
charged at a national rate. Lines are open
8.30 am to 5.30 pm Monday to Friday,
excluding UK public holidays.

Or visit Equiniti’s Shareview website:
www.shareview.co.uk

Company advisors

Independent Auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT

Joint corporate brokers

Jefferies International
100 Bishopsgate
London EC2N 4JL

Peel Hunt LLP
100 Liverpool Street
London EC2M 2AT

Shore Capital
Cassini House
57 St James’s Street
London SW1A 1LD

Financial PR advisers
Headland
Cannon Green
27 Bush Lane
London EC4R 0AA

Trade marks
The Company’s trade marks are shown
in italics throughout this annual report.
The Company has an exclusive worldwide
licence to use the Loyd Grossman name
on certain products. The Company has
an exclusive licence to use the Cadbury
trademark in the UK (and a non-exclusive
licence for use in other specified territories)
on a variety of ambient cake products.
Cadbury is a trade mark of the Mondelēz
International Group. Cup Noodles and
Soba noodles are trademarks of Nissin
Foods Holding Co., Limited (‘Nissin’), who
is the Company’s largest shareholder. The
Company has entered into a co-operation
agreement with Nissin to market and
distribute certain Cup Noodles and Soba
noodles products in the UK and certain
other jurisdictions.

Cautionary Statement
The purpose of this annual report is to
provide information to shareholders
of Premier Foods plc (‘the Company’).
The Company, its directors, employees
and advisors do not accept or assume
responsibility to any other person to
whom this document is shown, or into
whose hands it may come, and any such
responsibility or liability is expressly
disclaimed. It contains certain forward-
looking statements with respect to the
financial condition, results, operations
and businesses of the Company. These
statements and forecasts involve risk and
uncertainty, because they relate to events
and depend upon circumstances that will
occur in the future. There are a number
of factors that could cause actual results
or developments to differ materially
from those expressed or implied by these
forward-looking statements and forecasts.
Nothing in this annual report should be
construed as a profit forecast.

184

Premier Foods plc Annual Report for the 52 weeks ended 1 April 2023The production of this report supports the work of the Woodland Trust,
the UK’s leading woodland conservation charity. Each tree planted will
grow into a vital carbon store, helping to reduce environmental impact
as well as creating natural havens for wildlife and people.

Premier Foods plc
Premier House
Centrium Business Park
Griffiths Way
St Albans
Hertfordshire
AL1 2RE

01727 815850

www.premierfoods.co.uk

Registered in England and Wales No. 5160050