Finsbury said group like-for-like sales, excluding free-from, were in line with expectations

Finsbury said group like-for-like sales, excluding free-from, were in line with expectations

Finsbury Food Group, the UK baker, has said it expect profits to be "significantly" ahead of expectations for its full-year.

The cake, bread and bakery foods producer said today (15 July) that a successful equity placing in the first half, combined with the sale of its free-from division in the second half, has "transformed" the company's balance sheet. Total debt is now lower than expected at below GBP10m (US$15.1m) versus GBP34m a year ago.

An improved balance sheet as allowed the group to step up investment in its bread business. 

Finsbury said group like-for-like sales, excluding free-from, were in line with expectations. It added that while its consumer markets remain "challenging", the company's continued focus on growth "in the right areas", combined with "relentless cost and efficiency initiatives" has enabled the group to achieve improved operating margins year-on-year.

"The sale of free from has proven hugely beneficial for the group, allowing further investment and laying the foundation for continued growth," said chief executive John Duffy. "The board is committed to continuing the successes of the past year, and I am confident that our improvements will assure shareholders and consumers alike of the company's fortitude and resilience in what continue to be adverse trading conditions."

Finsbury is stepping up capital investment in its core UK bakery division and earlier this month announced and expansion of capacity at its bread site in Salisbury.

Click here to read an interview with Duffy about the potential he sees in bread and the firm's growth plans.

Show the press release

Finsbury Food Group plc Pre-Close Trading Statement

· Profit expectations for the financial year ended June 2013 are significantly ahead of expectations · Debt and interest costs significantly reduced · Increased final dividend recommended

Finsbury Food Group plc (AIM: FIF), a leading manufacturer of cake and speciality bread, is today providing an update on trading for the full financial year, ended 29 June 2013, prior to entering its closed period on 23rd July.

Excluding Free From sales, the continuing Group like for like sales were in line with expectations. Whilst our consumer markets remain challenging, our continued focus on growth, in the right areas, combined with relentless cost and efficiency initiatives has enabled the Group to achieve improved operating margins year on year.

The successful £3.8m equity placing in the first half combined with the sale of the Free From division for £21m early in the second half has transformed the Company's balance sheet. Total debt is lower than expected at below £10m versus £34m a year ago. Consequently capital investment in our core UK Bakery division is now being stepped up significantly, providing both product capabilities led growth as well as improved cost competitiveness.

The Board is pleased to announce that profit expectations for the financial year ended June 2013 are significantly ahead of expectations, in part due to two additional months Free From sales included between deal date and completion date at end February 2013 but also due to the initiatives set out above. Due to the Company's financial performance for the year, the Board will be recommending an increased final dividend of 0.5p giving a total dividend payment of 0.75p for the year.

John Duffy, Chief Executive of Finsbury Food Group plc, commented;

"I am pleased to be announcing that the hard work and improvements made in the business have allowed us to recommend an increased dividend for our shareholders. The Board believes that this, combined with the driving down of debt, increased profit expectations and continued growth, is further ensuring shareholder value.

"The sale of Free From has proven hugely beneficial for the Group, allowing further investment and laying the foundation for continued growth. The Board is committed to continuing the successes of the past year, and I am confident that our improvements will assure shareholders and consumers alike of the Company's fortitude and resilience in what continue to be adverse trading conditions."

Original source: Finsbury Foods