26 Jul 2011 07:00
Date: | 26 July 2011 |
On behalf of: | Finsbury Food Group plc ('Finsbury', 'the Company' or 'the Group') |
Embargoed until: | 0700hrs |
Finsbury Food Group plc
Pre Close Statement
Finsbury Food Group plc (AIM: FIF), a leading manufacturer of cake, bread and gluten free bakery goods, is today providing an update on trading for the full financial year, ended 2nd July 2011, prior to entering its closed period.
The strong organic growth trend established in the first half has continued to strengthen during the second half. This resulted in total group revenue up 12.8% to £189.9m compared with the same period last year, successfully reversing the 6% decline of the last full year. There were no acquisitions or disposals during the period.
Sales in the larger Cake division are up 12% compared with the prior year to £139.9m. Approximately half the growth came from the UK cake business and half came from the Lightbody Europe (LBE) 50% owned joint venture export business. The UK cake growth resulted from a combination of increased promotional support as well as new products launched within retailer own brand and licensed brands which partially regained prior year sales declines. The LBE growth came from new sales contracts and distribution gains for third party ranges within the French market
Sales in the Bread and Free From division continued the strong growth trend of recent years, up 14.2% on prior year to £50m, again driven by strong growth from the Genius brand and latterly retailer brands in the fresh gluten free market and the Vogel's brand in the speciality bread market. The joint venture established in December with Genius Foods Limited to expand the fresh bakery free from portfolio continues to offer excellent growth potential.
It is pleasing to have returned the Group to strong organic growth. However the challenging operating environment of the last few years continues to offer significant head winds, with consumer confidence and disposable incomes depressed for the foreseeable future. Commodity and cost inflation has been high throughout the year and again in recent months with no sign of relief. The combination of higher sales growth and savings from internal efficiency projects only partially offset these costs to date and operating margins have reduced as a consequence. Further actions to improve efficiencies and recover these and additional commodity costs with the help of our customers are already underway.
Overall we have traded in line with expectations and banking covenants whilst continuing to reduce debt levels. Existing banking facilities with HSBC have been extended from 2014 to 2016.
Commenting, Chief Executive John Duffy said:
'Our business has performed robustly in challenging markets. The heavy investment of recent years in innovation, sales promotions and competitiveness has delivered sales growth of great tasting premium product ranges. However, relentless commodity price inflation on basic ingredients such as butter, sugar and flour has reduced our margins. With further commodity increases, the challenge on an ongoing basis is increasingly to recover these costs by reformulation and price increases whilst continuing the growth."
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For further information: | |
Finsbury Food Group plc | www.finsburyfoods.co.uk |
John Duffy (Chief Executive) | 029 20 357 500 |
Stephen Boyd (Finance Director) | |
Panmure Gordon | 020 7459 3600 |
Katherine Roe | |
Callum Stewart | |
Redleaf Polhill | finsbury@redleafpr.com |
Emma Kane/Rebecca Sanders-Hewett/ | 020 7566 6720 |
Jenny Bahr |
Publication quality photographs are available via Redleaf Communications on the numbers shown above
Notes to Editors:
§ Finsbury Food Group plc (AIM: FIF), a leading manufacturer of premium and celebration cakes, low fat cake slices and artisan, organic and gluten free bread and morning goods
§ Finsbury Food Group is the second largest manufacturer of Ambient Packaged Cake (excluding ISB) in the UK, a market valued at £886m (Source: Kantar Worldpanel Total UK Coverage, 52 we 10th July 2011).
§ The Group is also the market leader in the supply of gluten free baked goods to the UK's multiple grocers
§ The Group's strategy is to generate returns for shareholders by building a crafted bakery group focused on premium, celebration and well being that delivers for customers and consumers. Finsbury continues to develop its licensed brand portfolio to complement its core retailer brand relationships and improve its understanding of and response to changing consumer needs
§ Whilst the Company sees exciting organic growth opportunities in all its businesses and its short-term focus is on integrating and growing its existing businesses, the aim is to take advantage of the appropriate bolt on acquisitions to drive longer term value as opportunities and circumstance allow