Czech plans on hold at Lightbody as Finsbury makes an offer

Plans by Lightbody Celebration Cakes to open a new factory in the Czech Republic have been put on ice following its proposed acquisition by Finsbury Food Group.

Family-owned Lightbody, which operates two factories in Hamilton, Scotland, currently ships product for continental European customers to a depot in Rennes, where it also has an office. However, it had planned to open a large factory in Louny, near Prague, this year in order to service the market directly, and key employees had been learning Czech in preparation.

Finsbury Food Group chief executive Dave Brooks said: “Our core focus is obviously to integrate the UK businesses, so it would be a bit bold to set up in the Czech Republic right now. But it remains an option for the future, as longer term, you don’t want to be shipping vast amounts of product from Hamilton if you can supply locally.”

The proposed £37.5M takeover of Lightbody, which is subject to shareholder approval at an extraordinary general meeting on February 22, would transform Finsbury into the UK’s leading premium cake business, with sector leading positions in own-label premium cakes and celebration cakes, said Brooks.

“We’ve been talking informally for a long time and it became pretty obvious that it would be great to put the two businesses together.”

Synergies of £2M would come from closing down Finsbury’s California Cake subsidiary in Coatbridge and transferring production to Lightbody’s larger site at Hamilton, which was just six miles away, he added. “The majority of the 200 staff at California Cake will be able to transfer. However, we can’t rule out redundancies. We will start a formal 90-day consultation and every member of staff and the unions are being kept properly informed about what’s going on.”

Lightbody, which turned over £46.2M in the year to April 30, 2006, makes own-label celebration cakes, chocolate enrobed cakes, cereal snacks and bite-sized products for the major multiples, plus a range of products under licence for Disney and Thorntons.

Finsbury is a leading supplier of pre-packed celebration cakes, premium cakes, slices and speciality breads to the major multiples, operating from five factories in Cardiff, Salisbury, Bathgate, Coatbridge and Twechar. It made a £2.5M pre-tax profit on sales of £73.3M in the year to June 2006.