22nd Mar 2005 07:01
Finsbury Food Group PLC22 March 2005 Finsbury Food Group Plc Half Year to 31st December 2004 - Highlights • Turnover £29.2m (2003: £27.7m) • Profit before tax and exceptional items £0.7 (2003: loss of £0.3m) • Cash of £2.3m generated from sale of surplus land • Gross margins improved • Balance sheet virtually debt free by the year end • Successful Christmas 2004 program • Nestle deal on target • Nicholas & Harris performing ahead of expectations Finsbury Food Group plc Interim Report 31 December 2004 Dear shareholder, I am pleased to report that the Group has made good progress in the first sixmonths of this financial year following the successful implementation of theplans we set out at the beginning of 2004. During the period, we have continuedto strengthen the foundations of the business to create a robust platform forfuture growth. The Group delivered a profit before tax and exceptional items of £0.7m (2003:loss of £0.3m), and a profit of £2.5m (2003: loss of £0.3m) after exceptionalitems and before tax during the period. Turnover was £29.0m (2003: £27.7m).Normalised basic earnings per share were 2.18p (2003: (0.97p)). Memory Lane Cakes Ltd successfully completed its 2004 Christmas programme,producing a group of higher margin core products, more efficiently and moreprofitably. This resulted in improved consistency in the operations.Importantly, our exceptionally high levels of customer service were maintained. Our Nestle programme is progressing as expected. We have a strategy of targetedproduct development and we are currently introducing an exciting new range ofaround 10 new products, including chocolate enrobed snacks, and range extensionsto the initial products launched in 2004. Our speciality breads business, Nicholas & Harris Ltd, is performing ahead ofexpectations. It has already enjoyed investment from the Group's capitalexpenditure programme, which has eased workflows. Work will complete this monthon an extension to increase capacity of the site, allowing us to cater for theincreased volume being generated from growth with key customers. Simon Staddonwas appointed as Managing Director in January 2005 and has full responsibilityfor the running of Nicholas & Harris Ltd. New product development is an area of specific expertise for the Group andenables us to maximise opportunities from market trends, delivers innovation forour customers and caters for developing consumer tastes. During the period wehave developed exciting new products both in Nestle and in customer brandedformats in both Memory Lane and Nicholas & Harris. We are continuing our capital expenditure programme, across both businesses,which is delivering both improved efficiency and reducing the dependence onseasonal labour. In addition, the investment that we have made in strengtheningmanagement is now bringing benefits in improved gross margin and operationalperformance. In January 2005, we completed the disposal of a parcel of surplus land at ourCardiff site for a consideration of £2.35m. As a result of this and improvedcash flows from operations, the Group is expected to be virtually debt free atthe year-end. The outlook for the remainder 2005 and 2006 is positive, even though the marketplace remains competitive. Operationally, we are more efficient and productive.We continue to enjoy strong relationships with our blue chip retail customerbase and we are discussing growth agendas with all our major customers. Lord SaatchiChairman Consolidated Profit and Loss Account Unaudited Unaudited Audited six months six months Year ended ended ended 31 December 31 December 30 June 2004 2003 2004 £000 £000 £000 Notes Turnover 29,249 27,747 59,906Cost of sales (18,697) (19,672) (40,236) Gross profit 10,552 8,075 19,670 Distribution expenses (1,475) (1,373) (3,101)Administrative expenses (8,202) (6,897) (16,247)Other operating income 13 19 51 Operating profit/(loss) and profit/(loss) onordinary activities before interest andtaxation 888 (176) 373 Interest receivable - - 6Interest payable (211) (141) (203) 677 (317) 176 Exceptional item - sale of land 2 1,815 - - Profit/(loss) on ordinary activities before 2,492 (317) 176taxationTax on ordinary activities (216) 114 (51) Profit/(loss) on ordinary activities aftertaxation 2,276 (203) 125Proposed dividend - - (211) Profit/(loss) retained for the period 2,276 (203) (86) Basic earnings/(loss) per share 3 10.77p (0.97p) 0.59p Excluding exceptional items 2.18p (0.97p) 0.59p Diluted earnings/(loss) per share 3 9.79p (0.81p) 0.52p Dividend per share Nil Nil 1.00p Consolidated Balance Sheet Unaudited Unaudited Audited 31 December 31 December 30 June 2004 2003 2004 £000 £000 £000 Notes Fixed assetsGoodwill 2,099 2,215 2,157Negative goodwill (538) (567) (553) Total net goodwill 4 1,561 1,648 1,604Tangible assets 7,735 7,824 8,095 9,296 9,472 9,699 Current assetsStocks 2,012 2,266 1,551Debtors 10,667 9,802 9,622Cash at bank 5 252 - 5 12,931 12,068 11,178CreditorsAmounts falling due within one year (10,419) (12,835) (12,453) Net current assets/(liabilities) 2,512 (767) (1,275) Total assets less current liabilities 11,808 8,705 8,424 Creditors: amounts falling due afterMore than one year (2,700) (2,000) (1,600) Provisions for liabilities and chargesPension scheme (498) (498) (498) Total Net assets 8,610 6,207 6,326 Capital and reservesCalled up share capital 212 211 211Share premium account 6,447 6,437 6,440Capital redemption reserve 578 578 578Profit and loss account 1,373 (1,019) (903) Equity shareholders' funds 8,610 6,207 6,326 Consolidated Cash Flow Statement Unaudited Unaudited Audited Six months Six months Year ended ended ended 31 December 31 December 30 June 2004 2003 2004 £000 £000 £000 Net cash inflow/(outflow) from operating 1,112 (2,722) 32activities Returns on investments and servicing of financeInterest received - - 6Interest paid on bank loans, overdraft and loanstock (212) (141) (203) Net cash outflow from returns on investments andservicing of finance (212) (141) (197) Taxation recovered/(paid) 143 (254) (254) Capital expenditurePurchase of tangible fixed assets (536) (591) (1,226) Net cash outflow from capital expenditure (536) (591) (1,226) Equity dividend paid (211) (210) (210) Net cash inflow/(outflow) before use of liquidresources and financing 296 (3,918) (1,855) FinancingLoan notes repaid (9) - -Drawdown /(Repayment) of bank loans 600 (400) (800)Issue of ordinary share capital 8 48 52 Net cash inflow/(outflow) from financing 599 (352) (748) Increase/(Decrease) in cash in the period 895 (4,270) (2,603) Note: The proceeds of £2,350,000 from the sale of land were received in January2005. Notes: 1. The interim report, which is unaudited, does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985 (as amended). The comparative figures for the financial period ended 30June 2004 are not the company's statutory accounts for that financial period but are derived from them. Those accounts have been reported on by the company's Auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. There is no difference between the profits reported and the profits on an historical cost basis. The interim report has been prepared on the basis of the accounting policies consistent with those set out in the report and accounts of the company for the financial period ended 30 June 2004.2. The exceptional profit of £1,851,000 relates to the disposal of a parcel of surplus land at Cardiff. Consideration of £2,350,000 is included in debtors at the period end and was received in January 2005.3. The earnings/(loss) per share for the period are calculated on the weighted average number of shares in issue, 21,140,220 (2003 - 20,974,737 and 2004 - 21,051,766). Fully diluted earnings per share are based on 23,239,158 shares (2003 - 25,114,475 and 2004 - 24,176,878).4. Goodwill is being amortised over 20 years.5. At the balance sheet date the Group had drawn down all of a new loan facility of £3,000,000 and repaid a previous loan of £2,400,000.6. This interim report is being sent to shareholders and warrant holders and copies are available from the Company Secretaries, City Group P.L.C. at the registered office at 25 City Road, London EC1Y 1BQ. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
FIF.L