10th Jul 2006 07:00
Finsbury Food Group PLC10 July 2006 Date: 10th July 2006 On behalf of: Finsbury Food Group plc ("Finsbury" or "the Group") Embargoed until: 0700hrs Finsbury Food Group plc Trading Update Finsbury Food Group plc (AIM: FIF), one of the UK's leading manufacturers anddistributors of speciality cakes and breads, will be announcing its preliminaryresults for the twelve months ended 30 June 2006, on Tuesday, 19 September,2006. Prior to entering its close period, the Company is today providing anupdate on current trading. The Board is pleased to announce that the strong operational efficiencies andoverhead controls, which were highlighted in April 2006, have continued duringthe final three months of the current financial year. As a result, the Boardexpects that the Group's profit before tax and exceptional items for the year toJune 2006 will exceed current market forecasts. The Group has now completed the integration of the Scottish acquisitions(California Cakes, Campbells Cakes, and United Central Bakeries) made inNovember 2005 and the Board are pleased with the contribution being made bythese businesses. The commercial functions of sales and purchasing have beenstreamlined to provide greater efficiency in our dealings with our customers andto ensure all subsidiaries benefit from the best possible buying terms. New product development over the last six months has also been strong. TheBoard has remained focussed on the Group's core business objective: to be "thebest at what we do". Over the next six months a wide range of new excitingproducts will be brought to market. Continuing innovation remains the keyelement in achieving our goal. The UK's major grocery chains have all publicly committed to offering more spaceto their premium brands and the first wave of these re-launches is planned forthe Autumn. Following the £1m investment in a new small cake line (which beganproduction in April) at Memory Lane Cakes ("Memory Lane"), and with the additionof the Campbells Cakes capability to produce premium quality cold-set products,the Group can now provide a comprehensive solution to customers' premium cakerequirements. We believe we are well on our way to achieving a strong positionin this sector of the market. Nicholas & Harris ("Nicholas") is benefiting from the strong increase in demandfor organic bread products and premium morning goods. Consumers regard organicproducts as an important part of a health-conscious diet, whilst they continueto demand quality, as well as innovation - all facets in which the Group excels.Nicholas is working on a major re-launch of one large retailer's range oforganic products to help build that customer's presence in that sector. The £200,000 investment in segregating the "gluten free" facility in UCB isbeginning to show the tangible benefits which the Group envisaged. Our 'glutenfree' products were previously available in just Tesco. A range of UCB suppliedgluten free products can now be purchased in Asda and we expect further listingsin the other major multiples before Christmas 2006 as other retailers undertakecategory reviews. Low fat cake sales by California Cakes have remained fairly static, against thebackdrop of a UK market for low fat products which has stalled over the last 12months. However, the Group is committed to broadening the product portfoliooffered by this subsidiary and is currently working with Nestle to launch arange of children's products. These lines will complement those of Memory Laneand offer the Group a wider Nestle product capability. The extended range willbenefit from the significant marketing support that Nestle will be puttingbehind their children's brands to publicise the removal of all artificialcolours and flavourings from their products. On the personnel front, John Lomer, our Group Finance Director, has decided toleave the business at the end of September 2006 to return to consulting onstrategic development. The Board is extremely grateful to John for hiscontribution over the last three years, which has seen us consolidate ourfinancial systems and controls and enhance our reputation within the investmentcommunity. John leaves with our best wishes and will remain involved with theGroup until March 2007 to assist in the handover to his successor. An internal appointment has already been made, with Lisa Morgan being promotedfrom her current role as Finance Director of Memory Lane. Lisa, 35, has beenwith Memory Lane for nearly six years and has been an integral part of the teamwhich re-modelled that business during 2004 and 2005. The Board is delighted tobe able to offer this career progression to an outstanding candidate. Lisa willtake on the role of Group Finance Director (Designate) with immediate effectworking alongside John and will take full responsibility on 1 October 2006 whenshe will join the Group Board. The last few months have been a period of intense activity. Strong foundationshave been laid for the future development of the Group, with focus on improvingthe performance of the bakeries, continuing to manage the overhead cost base andcreating exciting new and innovative products for launch later in the year.Success in all these areas has provided a strong close to the 2006 financialyear and it offers good growth prospects for the year ahead. General market conditions are expected to remain challenging. However, the Boardis confident that the Group's focus on added-value segments of the £5bn bakerymarket offers the greatest opportunity for earnings growth. This, combined withour management team's strength and our flexible production capabilities gives usconfidence about the future. Commenting, Chief Executive Dave Brooks, said: "Over the last two years, the Group has become focussed on our mission to be "The best at what we do" and ensuring that we develop in growing marketsegments. Each subsidiary management team has totally embraced this concept andI am delighted for those people that their efforts and commitment are beingrewarded with the excellent performance in the year to June 2006, and a busylaunch program in the next six months. "As a Group, our focus over the next 12 months will be on maintainingoperational excellence, keeping a tight control on our cost base andconsolidating our position as the leader in thought and action in our targetmarkets. With the wider product range we now have following our Scottishacquisitions, we have an excellent base from which to drive forward in what willremain a very competitive marketplace." - ENDS - For further information: Finsbury Food Group plc www.finsburyfoods.co.ukDave Brooks (Chief Executive) 07831 787 382John Lomer (Finance Director) 0777 888 9977 Redleaf CommunicationsEmma Kane/Sanna Lehtinen 020 7955 1410 • Publication quality photographs are available via Redleaf Communications on the numbers shown above This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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