Premier Foods

Website: Premier Foods
Index: FTSE 250
EPIC: PFD
Supersector: Food, Beverage and Tobacco
Sector: Food Producers
Subsector: Food Products
Market Cap: £1.68B
Payout Frequency: Annual

Premier Foods Dividend Analysis and Summary

Headline dividend details

Dividend type: Final dividend
Amount: 3.36 pence per share (a 20% increase vs 2.80p)
Ex-dividend date: 25/06/2026
Record date: 26/06/2026
Payment date: 24/07/2026
Currency: GBP
Coverage (FY25/26): Adjusted EPS 15.8p ? dividend cover c. 4.7x (payout ratio c. 21%)
Policy: Progressive dividend expected to grow ahead of adjusted earnings; Board plans to introduce an interim dividend in FY26/27

Financial support for the dividend

Earnings growth: Adjusted EPS up 8.7% to 15.8p; trading profit up 6.7% to £200.4m
Cash generation: Free cash flow £153.1m; FY25/26 cash dividend paid was £24.2m (2.8p). The new 3.36p implies c. £29–30m cash outflow, still >5x covered by FY25/26 FCF
Balance sheet: Net debt £95.2m; Net debt/Adjusted EBITDA 0.4x; cash and equivalents £242.1m; undrawn RCF (now £367.5m) and an undrawn £275m bridge facility
Pensions: No deficit contributions; dividend match removed; scheme in surplus; admin costs to be funded by the scheme (c. £5m p.a. saving)

Dividend sustainability and growth outlook

Current payout is conservative (c. 21% of adjusted EPS), with strong earnings and cash coverage, suggesting high sustainability
Management reiterates a progressive policy “growing ahead of adjusted earnings,” and plans to add an interim dividend from FY26/27 — both point to a rising dividend trajectory
Low leverage and robust FCF provide ample headroom to support both capex (guided to £55–60m in FY26/27) and dividend growth
Underlying branded growth, margin expansion, and market share gains in Grocery and Sweet Treats underpin medium-term cash generation

Structural and policy developments relevant to dividends

Introduction of an interim dividend from FY26/27 (quantum to be updated at HY results on 12 Nov 2026) — shifts from a final-only to interim+final structure, likely smoothing cash returns through the year
Recent M&A: Acquisition of Merchant Gourmet; all acquired brands delivered double-digit revenue growth; management is “actively exploring further M&A”
Financing flexibility enhanced: RCF increased and extended to 2031; £275m bridge facility in place to support bond repayment/refinancing
Pension de-risking and removal of dividend match materially reduce constraints on shareholder distributions

Risks and flags to dividend stability

October 2026 bond maturity (£330m): Requires refinance or repayment; liquidity lines and cash are strong, but refinancing terms could lift interest costs (company guides net regular interest unlikely to fall in FY26/27)
Capital allocation balance: Stated medium-term leverage target 1.0–2.0x and ongoing M&A could compete with dividend growth if pursued aggressively
Macro and operational: Management notes macro/geopolitical risks; international volatility (e.g., Australia cake destocking) could affect cash generation in pockets
Policy cadence: Commitment to grow dividends ahead of adjusted EPS implies cover may compress if earnings growth moderates

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency

Total (Annual Dividends Per Share): 0.00p

Dividend Yield = Annual Dividends Per Share (0.00p) ÷ Share Price (193.7p) = 0%

Ex Dividend Date	Payment Date	Type	Amount	Currency
25/06/2026	24/07/2026	Final	3.3600p	GBX
26/06/2025	25/07/2025	Final	2.80p	GBX
27/06/2024	26/07/2024	Final	1.73p	GBX
29/06/2023	28/07/2023	Final	1.44p	GBX
30/06/2022	29/07/2022	Final	1.20p	GBX
01/07/2021	30/07/2021	Final	1.00p	GBX

Year	Final	Currency	Total	Change
2024	1.728	GBX	1.728	20.000
2023	1.440	GBX	1.440	20.000
2022	1.200	GBX	1.200	20.000
2021	1.000	GBX	1.000

Number of Shares:

Payment	Paid	Amount
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