Blog: Profits up, sales down at Canada Bread ahead of Grupo Bimbo sale
Hannah Abdulla | 2 May 2014
Canada Bread has reported positive Q1 profit growth
Ahead of its sale to Mexican bakery firm Grupo Bimbo, Canada Bread has reported a rise in profits for its first quarter of 2014.
Though sales dipped slightly by 1.2% to US$342.8m as a result of lower sales volumes and interest costs, operating profit grew 18.6% to US$20.3m.
Net profit was up as a result of lower restructuring costs and interest costs during the first quarter of 2014 compared with the same quarter last year.
"All segments of our business continued to benefit from strategic capital investments that have improved operating efficiencies and lowered costs," said Richard Lan, president and CEO.
The firm is in the process of being sold to Mexico's Grupo Bimbo, a transaction that was agreed in February.
So far the Canadian Competition Bureau has given the green light for the transaction as has the US Department of Justice. The transaction is still awaiting aproval from Investment Canada.
Canada Bread is Canada's largest baker by market share with a stable of strong brands. It also has a presence in the US and UK. The group generates annual sales of around C$1.43bn and EBITDA of C$185m. The group's profit margin stands at almost 13%, compared to Bimbo's EBITDA margin of 10%. For Bimbo, the acquisition is about strengthening its global strategy and expanding its presence in Canada and the UK. The deal beefs up Bimbo's position as a global player in the bakery industry, expanding its geographical reach and diversifying its product line-up.
"We continue to clear regulatory requirements to complete the sale of Canada Bread to Grupo Bimbo and our people are excited about opportunities to grow this business by joining the global bakery leader," said Lan.
There has been an increase in M&A among companies in the food sector in recent months - and management consultants at EY expect to the trend to continue....
Nelson Peltz is not letting go. The US billionaire investor is continuing in his quest to get PepsiCo to split in two - and has reportedly suggested a proxy battle with the company could be on the hor...
just-food has launched a section on its website dedicated to interviewing internationally-ambitious small- and medium-sized enterprises. ...
Australian rice firm SunRice has said an acquisition of Blue Ribbon Rice Group's milling assets will boost its own supply of "speciality" lines. ...
The boom in demand for dairy products in emerging markets has been underlined by the latest data on the largest companies in the industry....
- On the move: What's in store from Tesco's new CEO?
- The just-food interview: Premier Foods CEO Darby
- On the money: Danone denies strategy overhaul
- On the money: Unilever shifting into growth spots
- Comment: Danone could be mulling strategy shift
- UPDATE: Premier establishes international unit
- Campbell issues warning on 2014/15 fiscal year
- S&A Foods announces restructure, 55 jobs to go
- Universal Robina to buy biscuit firm Griffin's
- Premier launches Oxo pots range in UK