FIF.L Regulatory News (FIF)

Finsbury Food Group plc

Proposed acquisition of Johnstone's Just Desserts

Finsbury Food Group plc (AIM: FIF), a leading UK specialty bakery manufacturer of cake, bread and morning goods for both the retail and foodservice channels today announces the proposed acquisition of the business, production assets, stock and customer list of Johnstone's Just Desserts Ltd ('Johnstone's') from administrators FRP Advisory. 

Johnstone's, a supplier to the leading national coffee shop chains, produces cake, including its renowned caramel shortcake. Unaudited turnover for 2014 was £9m.

This proposed acquisition signals the escalation of Finsbury's entry into the foodservice cake channel and in particular the high growth national coffee shop segment. This is in line with the Group's channel diversification strategy, indicated at the recent acquisition of Fletcher's in 2014.

Completion of the acquisition is conditional on the finalisation of property lease details which both the Group and FRP are working on to complete as soon as possible. Finsbury will provide staff in relation to manufacturing and finance, to serve the purpose of ensuring a smooth integration process until completion

Finsbury intends to work with the Johnstones management team at its existing site in East Kilbride to build on its strong customer relationships and market position and drive growth focusing on its high quality, well respected, coffee shop product ranges. All 150 employees will remain with the company.

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

"Johnstone's Just Desserts will be a bolt on acquisition and is in line with our strategy to diversify into new channels. This, illustrates the Group's continued reach into the foodservice 'out of home eating' market and the broadening of our product offering and customer base.

"The strength of Johnstones' customer relationships are testament to the quality of its products and we look forward to welcoming the Company into the Finsbury Group and providing the resources and investment to develop its full potential over the coming years."

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 £926m (Source Symphony IRI 52 w/e 6th December 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.