FIF.L Regulatory News (FIF)

Finsbury Food Group plc

Pre-Close Trading 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 first half of the current financial year, ended 29th December 2012, prior to entering its close period.

Total Group sales revenues increased to £103.3m, versus £102m in the prior year period, in line with management expectations for the period.

The UK Cake business grew 2%, £1.1m, broadly in line with the market whilst as forecast Lightbody Europe, the Group's 50% owned joint venture business, declined by £1.6m or 17% due to adverse exchange rate movements.

The Group's Bread and Free From division continued to deliver strong growth, an increase of £1.8m or 7% versus the prior year, to give total sales of £27.4m for the period. This is an encouraging continuation of the divisions long term performance trend.

Our outlook on the trading environment has stood us in good stead during the first half and remains unchanged for the second half. Consumers remain under considerable financial pressure and continue to be value conscious and deal focused. Key ingredients such as sugar, egg and flour are also inflationary as are more general costs such as energy. Finsbury's focus on internal efficiency improvements as well as sales growth and recovery of commodity inflation via pricing has been successful in slightly improving first half operating margins although they remain low.

The Group remains confident of continuing to achieve growth and efficiency opportunities across its businesses and is trading comfortably in line with profit and debt reduction expectations.

John Duffy, Chief Executive of Finsbury Food Group plc, commented;

"Following last year's significant sales growth ahead of the markets in which we operate, I am pleased with the resilient growth and efficiency improvements delivered in the first half across the Group businesses in what has been a tough marketplace.

"November's successful equity raise, the first for five years, will accelerate our efficiency investments in the largest cake business whilst also allowing us to meet our strengthened target balance sheet during 2013. I am confident this is the best response to the continued market challenges ahead."

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Notes to Editors:

§ Finsbury Food Group plc (AIM: FIF), is 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 In Store Bakery) in the UK, a market valued at £903 m (Source: Kantar Worldpanel Total UK Coverage, 52 we 23rd December 2012 ).

§ 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.