UK firm Burton’s Biscuit Co. has booked a near-doubling in annual pre-tax profits, driven by a strengthened product mix and cost savings.
The company said today (2 September) full-year profit before tax rose GBP4.8m (US$7.5m) to GBP10m. EBITDA was up 24% to GBP34.6m, compared to GBO27.8m in the prior year.
Improved profitability was the result of lower operating costs and growing sales of higher-margin branded products, such as Wagon Wheels, Maryland cookies and Cadbury biscuits produced under licence from Mondelez International. So-called “power brand” sales were up 5%, Burton’s said. Power brands now account for almost 54% of total sales.
Total revenue, however, was down 3% as the company moved to exit low-margin contract business. Revenue fell to GBP333m.
Burton’s was put up for sale by its private-equity owners Apollo Management and CIBC last week.
A spokesperson for the biscuit maker emphasised that, from an operational perspective, it is “business as usual” for the biscuit group.
Apollo and CIBC have owned Burton’s since 2009. They took control of the company in a debt-for-equity swap with Duke Street Capital, which was forced to hand over the company to the lenders that had financed its GBP220m (US$286.3m) buy-out of Burton’s in 2007. Duke Street was left with a small stake in Burton’s.
Commenting today (2 September), Burton’s CEO Ben Clarke emphasised the company has made “further progress” towards delivering “top-tier financial returns.
“While we expect the economic outlook to remain challenging in 2013, with little sign of the squeeze on consumers’ disposable incomes easing, we have shown since 2009 that with the team and the business plan we have in place, Burton’s can prosper in challenging conditions,” Clarke suggested.
Click here for more on Burton’s strategic focus in just-food’s recent interview with CMO Stuart Wilson.