Premier Foods will swoop in for a £33m windfall after reaching a deal with the trustee of its pensions scheme to suspend deficit contribution payments next month.
The retail giant behind some of the nation’s favourite brands including Mr Kipling, Ambrosia, Bird’s Custard, Homepride cooking sauces and Oxo, made the announcement to markets this morning.
Premier Foods said it reached an agreement with the RHM Pension Scheme Trustee to suspend the contribution from 1 April, which was taking place earlier than expected “reflecting the strong performance of the pension scheme, following the segregated merger” in 2020.
The FTSE-listed firm said as a result it would benefit from a £33m windfall in cash flow for the financial year. It said there would likely be a £5m cost linked to running the scheme and a dividend match system, but they are expected to be unchanged.
Duncan Leggett, its chief financial officer, said: “The further significant progress in the funding position of the pension scheme has enabled us to take another important step to expected full resolution of the Scheme by the end of 2026.”
Leggett added: “This suspension of pension payments substantially increases the free cash flow available to us and presents us with enhanced capital allocation options to deliver on our growth ambitions.
“The Scheme has reached this position following strong stewardship by the Trustee over many years and we will continue to work collaboratively with them to further de-risk the Scheme.”