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Acquisitions fuel Premium Brands growth to record Q1 revenue

Sales set to reach up to $7.4 billion this year after steady growth through the decades
food-plate-premium-brands
Premium Brands has dozens of brands including many for processed meats and cheeses

Acquisitions are helping Vancouver-based Premium Brands Holdings Corp. (TSX:PBH) grow sales to record levels. 

The specialty foods maker, distributor and seller increased its quarterly revenue by 14.9 per cent, year over year, to $1.68 billion in the first three months of 2025 and remains on track to generate between $7.2 billion and $7.4 billion in revenue this year, the company said this morning.

Indeed, many dozens of acquisitions through the decades has helped Premium Brands become B.C.'s sixth largest public company, ranked by revenue, according to BIV's 2024 list of largest publicly traded companies. 

Its most recent acquisition saw it spend $20.8 million to buy Denmark Sausage Co. in a transaction that closed in March. 

The company released a presentation earlier this year showing that it had only $125 million in annual sales in 2000. By 2016 that had grown to $1.6 billion. Last year, the company generated about $6.5 billion. 

Premium Brands released an investor presentation this morning that included a chart showing 59 "acquisition opportunities." Of those, 16 are said to be in early stage discussions, while 15 are identified as future opportunities and 28 are listed as inactive.

“We continue to enjoy a robust deal pipeline and are working on several exciting opportunities that we expect to close in the coming quarters," CEO George Paleologou said in a statement.

"We are, however, committed to deleveraging our balance sheet over the course of 2025 and any transactions we complete will be done within this context."

While the company 20 years ago focused on Western Canada, it now operates across North America, and employs about 13,321 workers. 

Paleologou told BIV in an email in January that he was not particularly concerned about U.S. tariffs.

"In general terms we manufacture products in the jurisdiction that we sell them," he told BIV in that email. "We try to minimize the crossing of borders as much as possible. We believe that tariffs and counter tariffs will be neutral to us as some of our companies will benefit and some will get hurt but the two will offset."

This morning he told investors: "we made solid progress in the quarter on mitigating our exposure [to tariffs] and are confident that an escalation of the trade disputes between Canada and the U.S. will not have a direct material impact on our business."

Premium Brands' generated $321.7 million in gross profit, which is calculated by subtracting the cost of goods sold from its revenue.  When all expenses are added in, however, the company made $2.6 million in net income. 

Paleologou said that while acquisitions helped the company increase revenue, "they were a drag on our profitability as we are in the early innings of implementing a variety of operational and best-practice initiatives that will significantly improve their margins over the coming quarters."

The company also increased sales organically. 

“Our core protein, sandwich and bakery sales initiatives in the U.S. were again the big drivers of our performance, generating total organic growth for the quarter of over $100 million and an organic volume growth rate of 9.9 per cent," Paleologou said.

"We have invested almost $900 million over the last three-plus years to support these initiatives and are now starting to realize the related benefits."

The company's dozens of brands include Freybe, Grimm's Fine Foods and Hempler's.

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