Princes Group, the UK-listed food-and-drinks manufacturer, will look to raise prices to offset the higher costs the company faces due to the conflict in the Middle East.
Simon Harrison, Princes Group’s CEO, said today (31 March) the brands and private-label supplier was seeing “substantial cost increases across the supply chain”, pointing to fuel and shipping.
“Like every food manufacturer, we are facing some substantial cost increases across the supply chain. Where those costs are unavoidable and material, we will need to act to recover them,” Harrison said.
Harrison was speaking to analysts after Princes Group, which listed in London in October, published its 2025 financial results.
Revenue jumped 46% year-on-year, reaching £1.9bn ($2.5bn), due to the inclusion of businesses from majority shareholder NewPrinces that are under common control.
However, pro-forma revenue was down 6.5%, with Princes Group citing “deflationary pressures across several core raw materials” and its exit from “low-margin contracts”.
Asked by one analyst if the cost inflation emerging from the Middle East crisis could lead to an “end to the deflationary headwinds you’ve been facing”, Harrison replied: “We remain committed to working transparently with our customers and keeping food affordable. Our policy is that we’re only going to pass on inflation where we absolutely have to as a result of this conflict. This is not a margin-driving initiative. It’s to recover costs that come into our business.”
The Princes Group product range includes brands such as its namesake tuna and juice drinks, Napolina tinned tomatoes and Crisp ‘n Dry cooking oil. The business is also a manufacturer of own-label products for retailers.
Harrison, Princes Group’s CEO since 2024, indicated the company did not expect to see pressure on volumes if prices go up.
“In terms of consumer pricing, that’s obviously not controlled by us – the retail customers set the prices – but what I would say is that our products are affordable. They’re not premium priced,” he said. “Much of our portfolio is actually private label, so entry-level pricing, so, if we do see inflation coming through, we don’t envisage a negative impact on demand and volume because our products will remain entry level and affordable.”
He added: “I think it’s also important to say that, from a consumer perspective, we’ve been here before and, as inflation bites and people have potentially less money in their pocket, we start to see consumers change their behaviours. We start to see them probably eating out less in restaurants and bars, having less takeaways and ultimately cooking more in the home.
“That will probably be a positive impact for products that we sell. Things like pasta, tuna, cooking oil, tomatoes, baked beans, many, many other kind of kitchen-cupboard staples, will be more attractive to families as they cook in the home and look for affordable foods.”
Princes Group remains on the look-out for acquisitions. The company has a “medium-term” target of adding £1-1.5bn of revenue to its business through M&A.
Harrison said the group has the “ambition to drive further consolidation in the European food manufacturing sector” and has a “shortlist of five potential targets”.
In his presentation, there was an outline of the targets – three are in “ambient foods”, one a “leading fish producer” and another is in “a new category” – but, unsurprisingly, the companies were not named. Revenues were disclosed: three – including the business in the new product area – have revenue of around £500m, one of the ambient-foods businesses generates revenue of about £250m and the fish group approximately £100m.
Asked if Princes Group would look at smaller targets if any of those deals did not materialise, Harrison said: “We do need acquisitions that are big enough to serve a very big customer base and make the whole acquisition process efficient. We continue to target under-performing assets because we believe we can generate good returns through our turnaround expertise and we also continue to target industrial capability.
“One of our core kind of parts of our DNA, if you like, is that we want to produce almost everything that we sell in one of our own factories. Acquiring new industrial know-how is also a key part of our M&A strategy, and then, of course, expansion into new complementary verticals.”
He added: “We remain extremely confident in achieving the guidance we’ve given of an additional £1-1.5bn worth of revenue through M&A. We’re also confident, in our view, that the market remains very buoyant. In terms of potential targets, we continue to see multinational corporations assessing their portfolio, putting some interesting assets onto the market.”
Princes Group’s 2025 results also included a more-than-doubling of its adjusted EBITDA to £148m, driven by revenue from new entities and the benefit of cost-saving initiatives across the enlarged group.
Pro-forma adjusted EBITDA stood at £149.5m, 22.2% higher.
The company’s profit for the year reached £37.1m, versus a loss of £8.3m a year earlier.
Shares in Princes Group were up 4.16% at 388p at 11:24 BST today. The company’s shares listed at 475p.
“Princes ready to up prices amid Middle East cost pressure” was originally created and published by Just Drinks, a GlobalData owned brand.
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