Premier Foods’ shares rose to a nearly 13-year high on Wednesday as the company agreed to suspend pension deficit payments.
The Mr Kipling maker reached the agreement with the trustee of its pension scheme, and the change is due to be implemented next month.
The company will benefit from a £33 million increase in free cash flow for the financial year ending in March 2025.
Shares in the company surged 10% to 152.8 pence per share the morning of the announcement.
This is the highest level shares have reached since June 2011.
Chief finance officer of Premier Foods Duncan Leggett said in a statement, “The 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.”
Premier Foods make a range of products, from plain flour to cooking sauces and quick meals, as well as its well-known Mr Kipling range.
In January, it reported a 14.4% jump in sales in the fourth quarter of last year due to strong Christmas demand.
The Bisto gravy maker benefitted from a cost-of-living squeeze, which encouraged consumers to entertain at home over the winter period.
As a result of the jump, the brand introduced a number of promotional prices across products further driving volume sales.
The company will suspend pension deficit payments from 1 April.
Read More: Premier Foods See Sales Jump On Strong Christmas Demand
