Finsbury pre-tax profit rockets 95% after acquisition

By Michael Stones

- Last updated on GMT

All wrapped up: Finsbury's acquisition of Fetchers boosted pre-tax profit
All wrapped up: Finsbury's acquisition of Fetchers boosted pre-tax profit

Related tags Finsbury food group Mergers and acquisitions

Finsbury Food Group, the cake, bread and bakery goods manufacturer, has posted pre-tax profits up by 95% to £4.1M for the six months to December 27 2014 – boosted by its acquisition of the Fletchers Group of Bakeries.

The Cardiff-based baker Finsbury achieved a like-for-like profit boost of 77% during the period. Group revenue of £107.6M rose by 24.1% and by 5.6% on a like-for-like basis. Operating profit of £4.5M was 74% up, including the acquisition and up by 57% on a like-for-like measure.

In addition to the acquisition, Finsbury attributed the improved results to growth in its share of the cake market, production efficiencies leading to lower costs and the benefits of increased automation arising from capital investment. A key factor driving its cake share was the growth of its licensed brand portfolio – including its Disney Frozen celebration cake – and through its own-label round cake offering.

Acquisition of the Fletchers

The interim results included two months of trading after the acquisition of the Fletchers Group, which was bought last October for £56M from private equity owner Vision Capital. The acquisition was said to deliver a wider spread of customers across food retail and food service channels in cake, bread and morning goods businesses.

Finsbury chief executive John Duffy said the deal will help the firm evolve into one of the UK’s largest speciality bakery groups with annualised revenues of about £270M.

"We have seen notable growth, both organically and through the Fletchers acquisition, which is integrating well,” said Duffy. “We look forward to the remainder of the year with confidence and, despite a tough trading environment; we believe the group is in a strong position to deliver on our growth strategy.”

Results at a glance

  • Pre-tax profit 95% up to £4.1M
  • Like-for-like profit 77% up
  • Group revenue 24% up to £107.6M
  • Operating profit 74% up to £4.5M

Licenced brand portfolio

In a statement accompanying the results the firm reaffirmed its commitment to building a speciality and craft bakery group focusing on quality products catering for consumer trends such as premium, celebration and well-being. The business also pledged to develop a licenced brand portfolio to complement its core retailer and brand relationships.

While the economic environment was slowly improving, the UK grocery market remained challenging, said Finsbury. The business noted continuing industry consolidation and identified further mergers and acquisitions as playing a key role in the next phase of the group’s development.

At the end of last month Finsbury confirmed an interim dividend of 0.83p per ordinary share related to the financial year ended 30 June 2015. The dividend was expected to be paid to all shareholders on the register on April 24 2015.

Meanwhile, Finsbury Food Group won the coveted Food Manufacturing Excellence Award, Bakery manufacturer of the year 2014.

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