FIF.L Regulatory News (FIF)

Finsbury Food Group plc

Pre-Close Trading Statement

Finsbury Food Group plc (Aim: FIF), a leading manufacturer of cake and bread bakery goods is today providing an update on trading for the full financial year, ended the 28th June 2014.

The Board expects to report full year profit ahead of market expectations. The profit levels, which are ahead of the prior year, are as a result of the successful implementation of the activities outlined at the half year update. These include actions taken to stimulate sales, via additional market activity, and in addition, a reduction in costs via the benefits from capital investment and an overhead reduction programme implemented early in the second half. These actions have also mitigated against ongoing cost inflation.

Following the sale of the Free From business in February 2013, continuing full year Group sales revenues are £175.7m, versus £176.6m in the prior year. Second half growth in the UK Bakery business reversed the first half decline and sales for the year were broadly flat at £153.7m. Sales in Lightbody Europe, the Group's 50% owned European business have declined by 1.2% for the full year to £22.0 million, however this sales decline is accompanied by a favourable profit dynamic with a shift to higher margin business.

In line with our stated strategy, we have taken advantage of our strong balance sheet to double capital investment spend to over £6m in the year to underpin future growth via new capacity and innovation whilst also improving productivity and competitiveness. Within the UK Bakery division, cake capital investment projects successfully completed in the year include the new single serve cake slice 'snap pack' line as well as the largest cake bites robotic picking installation in the world. The Nicolas and Harris speciality bread facility expansion, delivering 60% additional space, has also been successfully commissioned and is now fully operational.

The Board will be recommending an increased final dividend of 0.75p giving a total dividend payment of 1p for the year as compared to 0.75p last year.

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

"Our continued capital investment programme is heralding positive signs and we are encouraged by the contribution that this has made. Although cost inflation keeps margins under pressure, the strategies we have in place have mitigated against this and with more favourable profit dynamics; we are well placed to take advantage of the market as it improves."

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Notes to Editors:

§ Finsbury Food Group plc (AIM: FIF), is a leading manufacturer of cake, bread and bakery goods. Within its Cake business, the Group's focus is premium and celebration cakes plus low fat cake slices. Its Bread business manufactures artisan and organic bread and also 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 £924m (Source: Symphony IRI w/e 21 June 2014)

§ 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.