Princes Group Reports Strong Profitability Driven by Margin Expansion

Princes Group PLC (LSE: PRN) has announced a robust trading update for the nine months ended September 30, 2025, showcasing significant gains in profitability. The food and beverage company's strategic focus on margin-accretive growth, operational efficiency, and disciplined portfolio management is yielding impressive results.

Headline Numbers:

• EBITDA: Up 51.5% to £111.1 million.
• EBITDA Margin: Expanded to 7.8%, a notable increase from 4.9% in the same period last year.
• Underlying Free Cash Flow: Reached £136.5 million.
• Revenue: £1.4 billion, impacted by deflationary pricing conditions.

The increase in EBITDA was fueled by structural margin improvements and the successful delivery of synergies, particularly in the Italian (+590 bps), Foods (+170 bps), and Drinks (+170 bps) segments. Disciplined working capital management and supplier negotiations further bolstered the company's free cash flow.

Despite a decline in revenue due to deflationary pressures in raw material costs, Princes Group demonstrated a strong focus on earnings quality. B2B channel sales experienced notable momentum, growing by 10% year-over-year, indicating successful commercial strategies.

The company's ability to generate strong free cash flow provides flexibility for potential acquisitions and investments in strategic growth initiatives. Prudent capital allocation and a focus on high-return projects are likely to enhance shareholder value.

Driver Breakdown:

• Operational Efficiency: Gains across UK and international manufacturing facilities.
• Pricing Discipline: Improved pricing and product mix management.
• Synergy Delivery: Realization of benefits from the acquisition of Princes by NewPrinces, including streamlined procurement and supplier management.

Simon Harrison, CEO of Princes Group, commented: “This has been a milestone period for Princes, with our admission to trading on the London Stock Exchange. We have taken decisive actions to enhance earnings quality, improve efficiency and strengthen our commercial partnerships.

“We are building a resilient, margin-accretive and customer-led business with a clear path for sustained growth. Our M&A and integration capability set along with the firepower we now have as a group is creating exciting opportunities to pursue value accretive M&A, in line with our stated strategy.”

The company reported a pro forma adjusted net cash position of £268.2 million as of September 30, 2025. This strong liquidity position offers substantial financial flexibility for future growth initiatives and potential acquisitions.

Shareholder loans were successfully capitalized into new ordinary shares, further strengthening the balance sheet.

Princes Group remains confident in delivering full-year performance in line with management's internal budget. The company is focused on executing its strategy of profitable, cash-generating growth, supported by a targeted pipeline of M&A opportunities.

The management team is confident in delivering its medium-term ambitions, which include incremental revenue of £1-1.5 billion through M&A, organic revenue CAGR of over 3%, and margin improvement of over 300 bps.