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Premier Foods plans capital reduction to offer potential dividend flexibility
StockMarketWire.com
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Mr Kipling cake and Bisto gravy maker Premier Foods said it was planning a capital reduction that would offer more flexibility on how it manages its resources, including 'the ability to pay dividends'.
However, the company said it had not made any decision as to the use of any realised profits.
In the past year, Premier Foods had completed a turnaround programme that had seen it trim its debt load and appoint new managers.
Its share premium account was currently an undistributable reserve, limiting its uses.
'The company is therefore proposing a capital reduction in order to cancel the amount standing to the credit of the share premium account and to transfer it to the company's profit and loss account,' it said.
'The realised profits thereby created would be applied to increase the accumulated profit on the company's profit and loss account.'
'This is intended to eliminate the profit and loss deficit and, in addition, to create additional distributable reserves for the company.'
Premier Foods said the capital reduction itself would not involve any distribution or repayment of capital or share premium and would not reduce its underlying net assets.
Story provided by StockMarketWire.com
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