Princes Group, a prominent player in the UK food and beverage industry, is gearing up to implement price increases as a strategy to counteract rising operational costs stemming from ongoing conflicts in the Middle East.
In a statement made today (31 March), Simon Harrison, the CEO of Princes Group, emphasized that the company is experiencing “substantial cost increases across the supply chain,” particularly in fuel and shipping.
Harrison articulated that these unavoidable costs necessitate action to recover expenses. He underscored the challenges faced by numerous food and drink businesses, highlighting that the company aims to keep food affordable while adjusting prices only when absolutely necessary due to the conflict.
Following Princes Group’s listing in London last October, the company recently shared its financial performance for 2025. Revenue surged by 46% year-over-year, reaching £1.9 billion ($2.5 billion). This impressive growth was largely attributed to the consolidation of businesses from major stakeholder NewPrinces.
However, pro-forma revenue declined by 6.5%, driven by “deflationary pressures across several core raw materials” and the company’s strategic exit from low-margin contracts. When analysts raised concerns about inflationary pressures from the Middle East crisis potentially reversing deflationary trends, Harrison reaffirmed his commitment to transparency and affordability, notably stating, “This is not a margin-driving initiative. It’s to recover costs that come into our business.”
The product portfolio of Princes Group includes well-known brands such as tuna, juice drinks, Napolina tinned tomatoes, and Crisp ‘n Dry cooking oil. The company also produces private-label goods for various retailers.
Looking ahead, Harrison expressed confidence that price increases would not significantly affect product volumes. He stated, “Our products are affordable… if we do see inflation coming through, we don’t envisage a negative impact on demand and volume.”
Consumer behavior trends indicate that during financial constraints, households often shift their spending habits. Harrison noted a likely increase in home cooking as families seek affordable food options, suggesting that staple items like pasta and canned goods could become increasingly appealing.
Moreover, Princes Group is actively seeking acquisition opportunities, with a medium-term target of increasing revenue by £1-1.5 billion through mergers and acquisitions. Harrison mentioned a “shortlist of five potential targets” in various sectors, including ambient foods and a leading fish producer.
He made it clear that while the company is particularly interested in larger acquisitions that can enhance efficiency, there remains flexibility to explore smaller opportunities if necessary. The focus is on acquiring underperforming assets and expanding industrial capabilities, ensuring that the company retains control over production.
In summary, Harrison expressed optimism about achieving the outlined revenue growth through strategic acquisitions, remarking on the buoyant market and the interest from multinational corporations interested in divesting certain assets.
Additionally, Princes Group reported over a doubling of adjusted EBITDA to £148 million, driven by revenue from newly integrated entities and successful cost-saving initiatives. The company concluded the year with a profit of £37.1 million, a significant improvement from a loss of £8.3 million the previous year.
As of 11:24 BST today, shares of Princes Group were up 4.16% to £3.88, having initially listed at £4.75.
