City Talk: Premier to reduce debt

Premier Foods is taking steps to extricate itself from huge debts of 1.37bn. The company is paying 167m to exit loss-making derivatives it used when Premier bought RHM back in 2007.

Premier has restructured swaps on interest rates, which have cost it 35m so far and had the potential to cost Premier up to 450m over the years to 2037. Premier has exited this little-understood sector of the financial market by paying a fixed charge of 167m in instalments over the next three years.

Premier has also been approached to sell off Quorn, the meat substitute company, around 250m, which would be used to reduce debt.

Booker profits rise

Booker, the cash and carry food group, announced profits up 24% to 36.9m in the 24 weeks to September 19. Sales rose 5.5% to 1.7bn in the period. It has also paid 14.5m to buy Ritter-Courivaud, a supplier of fine ingredients to upmarket restaurants and has snapped up drinks supplier Classic Drinks for 4m.

Ritter-Courivaud supplies meat such as venison to restaurants and will be run as a separate business with part of its range introduced to Booker branches. The company's website has performed well with internet sales up 35.4% at 244.8m. The delivered business also grew, up 16.1%,with sales of 434m.

Compass predicts growth

Catering group Compass is anticipating organic growth to move ahead by over 5% in the second half, compared with growth of only 0.4% in the first half in its latest trading review. Sales growth will be around 4% for the full year.

Compass has seen a sharp rise in new contracts it has catering contracts to supply Chelsea Football Club and Aviva, among many others. The company has used its large cash pile to spend 220m on astute purchases in Brazil, France, the UK, India and the USA.

Leahy sells shares

Sir Terry Leahy reckons the time is right to sell millions of his Tesco shares prior to stepping down in March 2011. He sold 3.3m shares in what is thought to be the first of a series of sales before his departure.