LONDON (ShareCast) - (Sharecast News) - Princes Group reported a sharp rise in profitability for the nine months ended 30 September on Tuesday, as margin expansion, efficiency gains and synergy delivery offset deflationary pressures on revenue.
The freshly-listed UK-based food and beverage group said EBITDA rose 51.5% year-on-year to £111.1m, with the EBITDA margin expanding to 7.8% from 4.9%.

Revenue totalled £1.4bn, reflecting price deflation in key raw materials, though the group noted continued momentum in higher-margin channels such as B2B, which grew 10% year-on-year.

Underlying free cash flow reached £136.5m, supported by tight working capital control and improved supplier management.

"This has been a milestone period for Princes, with our admission to trading on the London Stock Exchange," said chief executive Simon Harrison.

"We have taken decisive actions to enhance earnings quality, improve efficiency and strengthen our commercial partnerships.

"We are building a resilient, margin-accretive and customer-led business with a clear path for sustained growth."

He added that the group's merger and acquisition capability and strengthened balance sheet provided "exciting opportunities to pursue value accretive M&A, in line with our stated strategy".

Profitability improved across all divisions, led by Italian products, where margins rose 590 basis points, and both the foods and drinks units, which saw gains of 170 basis points each.

The company attributed its performance to operational efficiency initiatives, improved product mix and pricing discipline, and the exit of low-margin foodservice and private-label contracts.

Retailer partnerships in the UK and Europe were also strengthened, supporting structural margin improvement.

Princes said its synergy programme remained on track following its acquisition by NewPrinces in July 2024, with advanced efficiencies in procurement and supplier management delivering a £74.3m improvement in net working capital.

The group ended the period with pro forma adjusted net cash of £268.2m, bolstered by proceeds from its initial public offering and the capitalisation of shareholder loans.

The company said it continued to trade in line with expectations and was confident in delivering full-year performance consistent with internal budgets.

Management reaffirmed its medium-term targets, including incremental revenue of £1bn to £1.5bn through acquisitions, organic revenue growth above 3% per year, a 300-basis-point margin improvement to an EBITDA margin of 9%, leverage below two times, and a return on capital employed exceeding 20%.

"The operational and commercial improvements achieved during the period are expected to continue to support margin development and cash generation," the company said.

"Princes is now well positioned to build sustainable long-term value as a listed business."

At 1041 GMT, shares in Princes Group were up 2.44% at 455.87p.

Reporting by Josh White for Sharecast.com.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE