Amid increased speculation of a looming floatation or sale, United Biscuits reported a 25% profit serge in full-year results, proof, a UB spokesperson told just-food, that the company was successfully avoiding the negative consequences of the so-called ‘biscuit wars’.
The UK’s largest biscuit manufacturer reported that 2005 revenue from continuing operations increased by 4.7% to GBP1.3bn (US$2.26bn), while business profit increased by around 25% to a little over GBP2bn.
Commenting on the results, Malcolm Ritchie, chief executive, said: “While the market remains challenging, our financial performance during 2005 reflects the success of the strategies we initiated in 2004. I’m pleased to report we’ve had an encouraging start to 2006. The recent acquisition of Nik Naks and Wheat Crunchies complement our UK savoury snacks portfolio and show our desire to take market available opportunities to build the group’s presence in core markets.”
Priority brand revenue in 2005 increased by 2%, a reflection of the marketing and investment behind its priority brands, the company said. A total of 88% of UB’s portfolio is branded, augmented by the company’s acquisition of Nik Naks and Wheat Crunchies from Golden Wonder in February.
These strong results come despite the highly competitive nature of the UK’s biscuit market where a price war appears to be raging. In this environment Northern Foods, the owner of Fox’s Biscuits, has issued two profits warnings in the space of three months.
However, UB’s business strategy has remained unaffected Sofia Rehman, a UB spokesperson told just-food yesterday (30 March). “UB fully acknowledges that it is working in a competitive sector, but it has not cut pieces like many of its competitors,” she said.
UB has appointed the investment bank Goldman Sachs to conduct a strategic review of the business, causing some analysts to speculate that the company has pursued an aggressive marketing push in order to bolster financial results ahead of a possible floatation or sale.