Premier Foods has revealed plans to consolidate back office functions in a bid to cut costs throughout 2011.
The UK’s largest food producer and manufacturer of brands including Hovis bread, Mr Kipling cakes and Bird’s custard powder, announced the strategy as it unveiled a trading profit of £311 million in its preliminary results for the year ended 31 December 2010. This was a 0.6 percent increase compared with last year.
Robert Schofield, CEO of Premier Foods, said: “Our business has proved resilient, with branded volume market share growth, increased margin from procurement and manufacturing efficiency and lower operating expenses.”
However, he added: “There is more to do in each of these areas.”
To help it achieve its cost reduction goals, the company has implemented a new organisation structure, and appointed Tim Kelly as chief operating officer.
“This structure will manage all brands together rather than separately by division allowing for better prioritisation of resources; and consolidate back office functions to simplify back office processes and facilitate cost reduction,” the company stated in its results.
As part of its efforts to streamline its processes, Premier Foods said that it continued to roll out its SAP enterprise resource planning (ERP) system last year. The rollout began in 2006.
“Over the next few years we intend to complete the transition to SAP and to simplify our processes,” the company said.
The company has also completed its integration and manufacturing rationalisation programmes following the acquisitions of RHM in 2007 and Campbell’s.
In August 2010, Premier Foods signed a £9 million, six-year IT services contract renewal with Capgemini, to whom it has contracted services since 2001. The contract renewal running from 2014 covers the company’s infrastructure, including data centre services and infrastructure support.
The food producer brought SAP implementation back in-house from Atos Origin in 2009, saying that after acquiring the Campbell’s and RHM businesses in the prior two years it had the scale to carry out the work itself.