The boss of Princes Group has signalled the start of a major acquisition drive, sending shares in the tinned tuna giant soaring nearly five per cent following its recent admission to the London Stock Exchange.
Simon Harrison, chief executive of Princes, declared the listing a "milestone period" for the group, stating it has built the necessary "firepower" to pursue transformative deals. He confirmed the company is now actively seeking "value accretive mergers and acquisitions" in line with their long-term strategy.
Strong Financial Performance Fuels Ambition
The bold statement accompanied a robust trading update, revealing a dramatic 51 per cent surge in pre-tax earnings to £111.1 million for the nine months leading to September. This impressive growth propelled the company's earnings margin—a key indicator of profitability—to 7.8 per cent, up from 4.9 per cent the previous year.
Investors reacted enthusiastically, pushing shares to an early high of 467p before settling with a 1.7 per cent gain. This positive market sentiment comes despite a dip in revenue, which fell to £1.4 billion from £1.5 billion, a result the company attributes to a deflationary environment for raw materials.
Navigating Market Challenges and Future Prospects
Princes, the force behind household names like Napolina, Branston, and Crosse & Blackwell, emphasised its focus on "earnings quality," having absorbed costs from fluctuating ingredient prices. This strategy appears timely, as recent data from the British Retail Consortium (BRC) showed fresh food inflation rose to 4.3 per cent year-on-year in October.
The company's journey to the public market, however, had its hurdles. Its listing at the end of October was priced at the bottom of its marketed range, valuing the business at £1.2 billion—significantly less than the hoped-for £1.5 billion. Despite this, the valuation was sufficient for a likely place in the FTSE 250 index, though shares have fallen nearly five per cent since the initial float.
Princes joins a wave of new entrants to the London market, including Fermi, Shawbrook, and Beauty Tech. The City is watching closely to see if this trend will continue, though many are cautious ahead of the Autumn Budget. Chancellor Rachel Reeves has been warned to be "careful" with policies that could impact the recovering IPO market.
Julian Morse, chief executive of Cavendish, underscored this sentiment, stating, "The main driver of the IPO market is the economy, so if the government brings in policies which harm the economy, that is going to harm the IPO market."
