Scottish cake maker Lees Foods has reported a growth in full-year profits as higher sales offset increased costs.
Lees Foods, which is the subject of a takeover bid from its management, including CEO Clive Miquel, said today (8 May) its net profit increased by more than 11% in the year to the end of March.
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Net profit climbed 11.7% to GBP777,850 (US$1.3m). Operating profit amounted to GBP1.01m from GBP971,356 in the prior-year, while sales climbed 8.9% to reach GBP20.3m.
“In January 2011, I referred to the cost increases that we would be facing in 2011, due to the general rise in world-wide commodity prices and the specific cost increases in our raw materials and packaging,” CEO Clive Miquel said. “The steps we have taken to combat the impact of these cost increases have been successful in mitigating the effect of these cost increases during 2011.”
Miquel said protecting margins through managing the impact of “considerable ingredient and packaging cost increases” continues to be the company’s main focus.
“The cost increases we face in 2012 on two of our key ingredients, sugar and egg, are significant. In order to meet the current challenge of rising ingredient costs, it is vitally important that we successfully introduce new products at improved margin levels to continue our profitable growth,” he added.
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By GlobalDataLast month, the directors of Lees Foods launched a GBP5.6m (US$8.9m) takeover bid for the firm. Randotte, a company formed by the directors for the purposes of the acquisition attempt, offered 230 pence per share in a bid to acquire 100% of Lees’ outstanding share capital.
The Lees Foods’ directors are also investors in the company and, as they are involved in the takeover attempt, they cannot vote on the deal. Excluding their shares, investors owning 40.9% of Lees Foods’ shares have backed the deal.
However, there is some discontent among Lees Foods’ shareholder base at the level of the bid. Earlier this month shareholder group ShareSoc launched an online campaign aimed at rallying together small investors opposed to the buy-out.
A meeting of Lees Foods investors will be held on 22 May to vote on the offer.
Click here to view the full earnings release.
