19th Jan 2015 08:46
LONDON (Alliance News) - Finsbury Food Group PLC saw its shares rise early Monday after it said revenue had risen by nearly a quarter in the first half of its financial year, buoyed by the acquisition of Fletchers in its bakery division, and its operating margins also improved.
The maker of cake, bread and breakfasts said total sales in the six months to December 27 were up 24% on the year at GBP107.6 million, helped by organic growth of 5.6% or GBP4.9 million. However, the Fletchers acquisition, which was completed at the end of October, added GBP16 million of the revenue increase.
Its bakery unit sales rose 27.7% including Fletchers, with seasonal cake sales particularly strong.
Finsbury said its overseas unit, a joint venture export business that it owns half of, also finished the first half strongly, with sales for the whole half flat on the previous year, reversing a 3.1% decline in the first four months of the financial year.
"The strong sales growth and continued momentum was helped by new products such as Disney Frozen cakes, popular Christmas seasonal ranges and increased promotional activity. As previously stated, consumer markets remain challenging and the board anticipates that the Fletchers acquisition will drive the group's second half growth," the company said in a statement.
Finsbury said labour and general costs continued to rise, although the inflation has moderated compared with recent years. It more than offset these increases thanks to efficiencies it is driving through its ongoing capital investment programme, as well as overhead reductions it completed in the second half of its last financial year, meaning operating margins have improved.
"The Fletchers acquisition, while still in early stages of group integration, has shown very positive signs of growth and progress. In addition, our capital investment programme continues and has laid the foundation for the group's positioning in a market experiencing industry-wide pressures. These factors, along with the benefits of being a larger, more diversified specialty bakery group underpin our belief that the group is in a strong position for the year ahead," Chief Executive John Duffy said.
Finsbury shares were up 6.8% at 63.00 pence early Monday, making it one of the best-performing stocks in the AIM All-Share index.
By Steve McGrath; [email protected]; @stevemcgrath1
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