26 Nov 2014 07:00
Date: | 26 November 2014 |
On behalf of: | Finsbury Food Group plc ('Finsbury' or 'the Company') |
Embargoed until: 0700hrs | |
Finsbury Food Group plc
AGM Statement and Interim Results for Fennel Acquisition Limited
Finsbury Food Group plc (AIM: FIF), a leading UK speciality bakery manufacturer of cake, bread and morning goods for both the retail and foodservice channels, is today holding its Annual General Meeting (AGM"). At the AGM the Chairman will issue a trading statement for the Company which is set out below.
In addition to the AGM statement, Finsbury today announces the unaudited interim results for the 26 week period ended 27 September 2014 for Fennel Acquisition Limited ("Fletchers"), a company acquired by the Company on 30 October 2014.
AGM Trading Statement
At the AGM the Chairman will issue the following trading statement for the Company:
"In the first four months of the new financial year, total Company sales revenues grew to £57.3m. This represents organic growth of just over £2.1m, an increase of 3.9% versus prior year as the Fletchers acquisition was completed at the end of this period. The UK Bakery division grew by 5%, with a particularly strong performance from the Cake business. The overseas division, the Company's 50% owned joint export business, declined by 3.1% as it reduced the level of promotional sales versus prior year to optimise returns.
As forecast, our operating environment remains challenging as shoppers continue to focus on value, with input cost inflation moderating slightly but still remaining a factor. The actions taken last year to reduce overhead costs and reinvest in additional sales growth have been successful. The efficiency benefits of the ongoing capital investment programme are also now being successfully delivered, which will lead to an improvement in our operating margins during the course of this year and beyond.
Shareholders will be aware that the acquisition of Fletchers by the Company completed on 30 October 2014. The Directors are confident that the anticipated sales growth and scale efficiency benefits anticipated at the time of the acquisition will be realised in the coming months and years.
Overall the Directors are pleased to report positive trading performance for the Company as a whole and in line with the Board's expectations."
Unaudited interim results for the 26 week period ended 27 September 2014 for Fennel Acquisition Limited
As set out in the circular of the Company published on 10 October 2014, in accordance with AIM Rule 18, the Company is required to release financial information relating to Fennel Acquisition Limited for the six months to 27 September 2014. These financial results reflect a period prior to the acquisition of Fennel Acquisition Limited by the Company.
The six month results to 27th September 2014 show sales of £49m and EBITDA of £3.9m in line with previous guidance. A reduction in sales promotions and the closure of the Barnsley factory by Fletchers in August 2013, and transfer of business to another Fletchers site, led to lower sales during the period but higher EBITDA post restructuring and one off costs compared to the prior year period.
FENNEL ACQUISITION LIMITED
Unaudited Interim Results for the 26 week period ended 27 September 2014
Consolidated Statements of Comprehensive Income (unaudited)
Notes | 26 week period ended 27 September 2014 | 26 week period ended 28 September 2013 | 52 week period ended 29 March 2014 | ||
£000 | £000 | £000 | |||
Revenue | 48,977 | 50,028 | 94,952 | ||
Cost of sales | (38,035) | (40,578) | (76,084) | ||
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Gross profit | 10,942 | 9,450 | 18,868 | ||
Distribution expenses | (7,326) | (7,389) | (14,202) | ||
Administrative expenses - Recurring Administrative expenses - Exceptional costs of restructuring |
2 |
| (1,369) - | (970) (1,245) | (2,351) (2,637) |
Administrative expenses - Total | (1,369) | (2,215) | (4,988) | ||
Loss on disposal of property, plant & equipment | - | (43) | (568) | ||
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Operating profit/(loss) | 2,247 | (197) | (890) | ||
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Financial income | 1 | 2 | 4 | ||
Financial expenses | (449) | (712) | (1,262) | ||
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Net financing expense | (448) | (710) | (1,258) | ||
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Profit/(loss) before tax from continuing operations | 1,799 | (907) | (2,148) | ||
Taxation | - | - | 1,243 | ||
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Profit/(loss) for the period | 1,799 | (907) | (905) | ||
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Total comprehensive income for the financial period | 1,799 | (907) | (905) | ||
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Operating profit/(loss) as stated above
Depreciation Exceptional costs of restructuring Loss on disposal of property, plant & equipment
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2 |
2,247
1,629 - -
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(197)
1,806 1,245 43
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(890)
3,694 2,637 568
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Total profit before interest, tax, depreciation and exceptional items (Adjusted EBITDA) | 3,876 | 2,897 | 6,009 | ||
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FENNEL ACQUISITION LIMITED
Unaudited Interim Results for the 26 week period ended 27 September 2014
Consolidated Balance Sheet (unaudited)
27 September 2014 |
28 September 2013 |
29 March 2014 | |||
£000 | £000 | £000 | |||
Non-current assets | |||||
Property, plant and equipment | 22,147 | 23,146 | 23,292 | ||
Deferred tax assets | 4,512 | 3,269 | 4,512 | ||
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26,659 | 26,415 | 27,804 | |||
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Current assets | |||||
Inventories | 5,143 | 4,900 | 5,928 | ||
Trade and other receivables | 15,913 | 14,710 | 13,092 | ||
Cash and cash equivalents | 614 | 250 | 6,371 | ||
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21,670 | 19,860 | 25,391 | |||
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Total assets | 48,329 | 46,275 | 53,195 | ||
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Current liabilities | |||||
Other interest bearing loans and borrowings | (12,019) | (5,370) | (17,281) | ||
Trade and other payables | (20,769) | (20,659) | (22,315) | ||
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(32,788) | (26,029) | (39,596) | |||
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Non-current liabilities | |||||
Other interest-bearing loans and borrowings | (2,409) | (8,915) | (2,266) | ||
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(2,409) | (8,915) | (2,266) | |||
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Total liabilities | (35,197) | (34,944) | (41,862) | ||
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Net assets | 13,132 | 11,331 | 11,333 | ||
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Equity attributable to equity holders of the parent | |||||
Share capital | 1 | 1 | 1 | ||
Share premium | 1,793 | 1,793 | 1,793 | ||
Capital contribution reserve | 28,022 | 28,022 | 28,022 | ||
Retained earnings | (16,684) | (18,485) | (18,483) | ||
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Total equity | 13,132 | 11,331 | 11,333 | ||
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FENNEL ACQUISITION LIMITED
Unaudited Interim Results for the 26 week period ended 27 September 2014
Consolidated Statements of Changes in Equity (unaudited)
| Share capital | Share premium | Capital contribution reserve | Retained earnings | Total equity |
£000 | £000 | £000 | £000 | £000 | |
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Balance at 30 March 2013 | 1 | 1,793 | 28,022 | (17,578) | 12,238 |
Total comprehensive income for the 26 week period | |||||
Loss for the 26 week period | - | - | - | (907) | (907) |
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Total comprehensive income for the 26 week period | - | - | - | (907) | (907) |
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Balance at 28 September and 29 September 2013 | 1 | 1,793 | 28,022 | (18,485) | 11,331 |
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Total comprehensive income for the 26 week period | |||||
Profit for the 26 week period | - | - | - | 2 | 2 |
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Total comprehensive income for the 26 week period | - | - | - | 2 | 2 |
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Balance at 29 March 2014 and 30 March 2014 | 1 | 1,793 | 28,022 | (18,483) | 11,333 |
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Total comprehensive income for the 26 week period | |||||
Profit for the 26 week period | - | - | - | 1,799 | 1,799 |
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Total comprehensive income for the 26 week period | - | - | - | 1,799 | 1,799 |
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Balance at 27 September 2014 | 1 | 1,793 | 28,022 | (16,684) | 13,132 |
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FENNEL ACQUISITION LIMITED
Unaudited Interim Results for the 26 week period ended 27 September 2014
Consolidated Statements of Cash Flows (unaudited)
26 week period ended 27 September 2014 | 26 week period ended 28 September 2013 | 52 week period ended 29 March 2014 | ||
£000 | £000 | £000 | ||
Cash flows from operating activities | ||||
Profit/(loss) for the period | 1,799 | (907) | (905) | |
Adjustments for: | ||||
Depreciation | 1,629 | 1,806 | 3,694 | |
Financial income | (1) | (2) | (4) | |
Financial expense | 449 | 712 | 1,262 | |
Loss on disposal of property, plant and equipment | - | 43 | 568 | |
Taxation | - | - | (1,243) | |
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3,876 | 1,652 | 3,372 | ||
(Increase)/decrease in trade and other receivables | (2,821) | (1,509) | 109 | |
Decrease/(increase) in inventories | 785 | 262 | (766) | |
(Decrease)/increase in trade and other payables | (1,561) | (1,290) | 339 | |
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Net cash from operating activities | 279 | (885) | 3,054 | |
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Cash flows from investing activities | ||||
Proceeds from sale of property, plant and equipment | - | - | 20 | |
Interest received | 1 | 2 | 4 | |
Acquisition of property, plant and equipment | (484) | (3,641) | (6,220) | |
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Net cash from investing activities | (483) | (3,639) | (6,196) | |
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Cash flows from financing activities | ||||
(Repayment)/draw down of bank loans | (5,247) | (2,934) | 8,768 | |
Repayment of loan notes | - | - | (6,934) | |
Interest paid | (306) | (334) | (363) | |
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Net cash from financing activities | (5,553) | (3,268) | 1,471 | |
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Net decrease in cash and cash equivalents | (5,757) | (7,792) | (1,671) | |
Cash and cash equivalents at beginning of period | 6,371 | 8,042 | 8,042 | |
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Cash and cash equivalents at end of period | 614 | 250 | 6,371 | |
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FENNEL ACQUISITION LIMITED
Unaudited Interim Results for the 26 week period ended 27 September 2014
Notes
(forming part of the financial statements)
1. Basis of preparation
This group financial information for the periods ended 27 September 2014, 28 September 2013 and 29 March 2014 has been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs").
The interim report, which is unaudited, does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006. The comparative figures for the financial year ended 29 March 2014 have been extracted from the statutory accounts for that year and converted to Adopted IFRS for the purposes of the interim report. The statutory accounts for the period ended 29 March 2014, which were prepared in accordance with UK GAAP, have been reported on by the company's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The group financial information consolidates those of the Company and its subsidiaries (together referred to as the "Group").
It should be noted that current liabilities exceed current assets. Having reviewed the Group's plans the Board has reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group has strong asset backing and a strong debtor book. Accordingly, the Board continues to adopt the going concern basis in preparing the financial statements.
2. Exceptional costs of restructuring
In August 2013 the business located in Barnsley was closed. All trading operations and relationships along with principal assets were transferred to the Grain D'Or business in London. There has been no loss of turnover or a significant change in operations as a result of this closure. The exceptional revenue costs to transfer the business, develop the London site and close the Barnsley site were £nil for the current period, £1.2 million for the period ended 28 September 2013 and £2.6 million for the period ended 29 March 2014. In addition, £3.5 million of capital improvements were made to the Grain D'Or site.
3. Refinancing
In December 2013 new financing facilities were arranged with ABN AMRO Bank N.V. The new facility was for a period of five years. As part of this refinancing activity in December 2013 loan notes and accrued interest of £6.9 million owing to the ultimate parent undertaking were repaid reducing the long term principal loan amount to £1.9 million.
4. Subsequent event
On 9 October 2014 the shareholders entered into an agreement with Finsbury Food Group Plc to dispose of the entire issued share capital of the company. At the Finsbury Food Group Plc General Meeting held on 29 October all resolutions in connection with the acquisition of Fennel Acquisition Limited as announced by the Finsbury Food Group Plc on 10 October 2014, were duly passed. The acquisition completed on 30 October 2014 and at this time all debt owing to the Fennel Acquisition Limited ultimate parent company (Eliot Luxembourg Holdco SARL) and all bank debt was repaid in full. On October 30, 2014 new financing facilities were arranged with HSBC Bank Plc and Lloyds Bank Plc. As a result of the changes in debt financing and the change in ownership of the company, certain elements of the balance sheet are not reflective of the results and financial position of the group going forward.
For further information: |
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Finsbury Food Group plc | www.finsburyfoods.co.uk |
John Duffy (Chief Executive) | 029 20 357 500 |
Stephen Boyd (Finance Director) | |
Cenkos Securities plc | |
Bobbie Hilliam (Corporate Finance) | |
Alex Aylen (Sales) | |
Redleaf | finsbury@redleafpr.com |
Rebecca Sanders-Hewett | 020 7382 4730 |
Jenny Bahr |
Notes to Editors:
§ Finsbury Food Group Plc (AIM: FIF) is a leading UK manufacturer of cake and bread bakery goods, supplying a broad range of blue chip customers within both the Grocery retail and 'out of home eating' foodservice sectors including major multiples and leading foodservice providers.
§ Following the acquisition of the Fletchers Group of bakeries, the Company is one of the largest speciality bakery groups in the UK with initial annualised sale of over £270m.
§ The Company's bakery product range is comprehensive and includes:
- Large premium and celebration cakes;
- Small snacking cake formats such as cake slices and bites.
- Artisan, healthy lifestyle and organic breads through to rolls, muffins (sweet and savoury) and morning pastries, all of which are available both fresh and frozen dependent on customer channel requirements.
§ The Company is now the second largest manufacturer of ambient packaged cake (excluding In Store Bakery) in the UK, a market valued at £924m (Source Symphony IRI w/e 21 June 2014). The annual bread and morning goods market has a value in excess of £3.5 billion (source Kantar Worldpanel). The UK foodservice bakery sector is worth approximately £900 million per annum, 70 per cent of which is in morning goods.
§ The Company comprises a UK Bakery division and an Overseas division:
- UK Bakery has manufacturing sites in Cardiff, Hamilton, Salisbury, Sheffield, London and Manchester.
- The overseas sector comprise the Company's 50% owned Company Lightbody Stretz Ltd supplies and distributes the Group's UK manufactured products and third party products primarily to Europe.