Inter Link Foods, a UK manufacturer of private label, branded and licensed cake products, has said it plans to raise £8m (US$14.7m) through a share placement.
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The company said the placing was aimed at funding “a higher level of trading and additional capacity”.
Inter Link said its sales performance had been very strong in the first four months of the current financial year with overall sales 31% ahead of the same period last year and product launches and new listings continuing at a high level.
The company said it sees opportunities to expand its private label cake business and believes it is in a position to secure further supply deals to the UK’s multiple retailers after rival cake firm RHM decided to reduce its private label business to focus on its brands, which include Mr Kipling cakes.
“In order to take full advantage of the opportunities presented, Inter Link Foods needs to be in a position to react quickly to demands from the multiple retailers. With its current level of bakery capacity, the company is not able to fulfil the potential additional demand. The placing will provide the company with the funds necessary to support a higher level of trading and to finance the creation of the additional capacity required,” Inter Link said.
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By GlobalDataThe company said it had not yet reached a decision about how to increase its manufacturing capacity, but it is exploring a number of opportunities either to grow organically by investing in further bakery equipment or to make strategic acquisitions in order to acquire further capacity. An acquisition may also provide the company with new products lines and customers thereby improving its competitive position.
“We have stated our objective of becoming the largest private label cake supplier in the UK and the second largest cake supplier in the UK and we believe this funding will provide us with the increased flexibility to take advantage of the changes that are currently taking place in the market,” said Alwin Thompson, executive chairman of Inter Link Foods.
