UK: Finsbury sees H2 sales rebound boost FY profit
Finsbury FY profits see year-on-year growth
Finsbury Food Group expects to beat City expectations for annual profits thanks to an improvement in sales in the second half of the year and the impact of cost cuts.
In a trading update today (17 July), Finsbury said it anticipates profit in the 12 months to 28 June to come in "ahead of market expectations" and ahead of last year's level. The board will recommend a final dividend of 1p, up from 0.75p last year, the cake maker said.
Finsbury revealed sales in the period totalled GBP175.7m (US$300.7m), compared to GBP176.6m in the prior year. The group said that its second-half performance offset top-line pressure seen in the first six months of the year.
The company also increased its capital investment in the year to "underpin future growth". Finsbury said it invested in new capacity and innovation whilst also improving productivity and competitiveness.
CEO John Duffy said: "Our continued capital investment programme is heralding positive signs and we are encouraged by the contribution that this has made. Although cost inflation keeps margins under pressure, the strategies we have in place have mitigated against this and with more favourable profit dynamics; we are well placed to take advantage of the market as it improves."
Finsbury Food Group plc (Aim: FIF), a leading manufacturer of cake and bread bakery goods is today providing an update on trading for the full financial year, ended the 28th June 2014.
The Board expects to report full year profit ahead of market expectations. The profit levels, which are ahead of the prior year, are as a result of the successful implementation of the activities outlined at the half year update. These include actions taken to stimulate sales, via additional market activity, and in addition, a reduction in costs via the benefits from capital investment and an overhead reduction programme implemented early in the second half. These actions have also mitigated against ongoing cost inflation.
Following the sale of the Free From business in February 2013, continuing full year Group sales revenues are £175.7m, versus £176.6m in the prior year. Second half growth in the UK Bakery business reversed the first half decline and sales for the year were broadly flat at £153.7m. Sales in Lightbody Europe, the Group's 50% owned European business have declined by 1.2% for the full year to £22.0 million, however this sales decline is accompanied by a favourable profit dynamic with a shift to higher margin business.
In line with our stated strategy, we have taken advantage of our strong balance sheet to double capital investment spend to over £6m in the year to underpin future growth via new capacity and innovation whilst also improving productivity and competitiveness. Within the UK Bakery division, cake capital investment projects successfully completed in the year include the new single serve cake slice 'snap pack' line as well as the largest cake bites robotic picking installation in the world.
The Nicolas and Harris speciality bread facility expansion, delivering 60% additional space, has also been successfully commissioned and is now fully operational.
The Board will be recommending an increased final dividend of 0.75p giving a total dividend payment of 1p for the year as compared to 0.75p last year.
John Duffy, Chief Executive of Finsbury Food Group plc, commented; "Our continued capital investment programme is heralding positive signs and we are encouraged by the contribution that this has made. Although cost inflation keeps margins under pressure, the strategies we have in place have mitigated against this and with more favourable profit dynamics; we are well placed to take advantage of the market as it improves."
Original source: Finsbury Food Group
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