Burton’s Biscuits agrees deal for Thomas Fudge’s

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Burton’s Biscuit Co. has agreed a deal to acquire premium biscuit manufacturer Thomas Fudge’s from private equity owner Livingbridge.

Burton’s said the acquisition marks an “important milestone” in its strategy and is its first major piece of M&A since being bought by Ontario Teachers’ Pension Plan in 2013.

Ontario vowed to grow the business via acquisitive growth, but missed out in the auction for United Biscuits in 2014 and the widely mooted merger deal with 2 Sisters-owned Fox’s Biscuits never came to fruition.

Burton’s said the premium biscuits sector is one of the fastest-growing confectionery categories as growing numbers of consumers are seeking indulgence delivered by provenance, high-quality ingredients and engaging textures.

Nick Field, Burton’s Biscuit Co.’s CEO, said the acquisition of the Dorset-based premium biscuit supplier represented a “continued commitment and investment by Burton’s to extend our capability and bring new and exciting products to market in both the sweet and savoury premium segments.”

He commented: “Thomas Fudge’s is a great business with a fantastic portfolio of premium products and baking expertise handed down through generations. The bakery provides a hugely complementary production capability to Burton’s own bakeries, extending into the more premium and artisanal end of the category with their branded, retailer brand and Marmite products baked under licence. We are excited about the opportunity to develop these three important pillars and look forward to working with our retail partners to drive growth through innovation and excitement in the category.”

Emma Davies, Thomas Fudge’s CEO, said: “We’re really excited about becoming part of the Burton’s family as we enter our next phase of development as a business and would like to thank Livingbridge for their support in recent years.”

In recent years Burton’s has focussed on building its private label business and has launched MARS into the Biscuits fixture, building a range of biscuits worth in excess of £11m in its first year.

Morning update

Meat producer Cranswick (CWK) has updated the market on its trading for the three months to 31 December, announcing that sales fell 2% year-on-year as strong growth in poultry and continental products was offset by lower sales from other, pork related, categories.

It said UK pig price continued to ease during the period, ending the quarter 7% lower than at the same stage last year, which was reflected in selling prices.

However, it said overall performance over the festive period was “robust”, reflecting a “well-executed Christmas plan, strong cost control and operational efficiencies”.

Construction of the group’s new poultry processing facility in Eye, Suffolk, is continuing to plan with the exterior building works nearing completion and commissioning anticipated towards the end of the next financial year.

Cranswick has also agreed a long-term supply agreement with Wm Morrison Supermarkets plc to supply fresh poultry from the new Eye facility and will shortly start supplying the supermarket with a range of cooked poultry products from its added value poultry facility in Hull.

It said its overall financial year will see its operating margin decline, reflecting the potentially challenging commercial landscape, together with start-up and commissioning costs associated with the new Eye Facility, only partly offset by management actions.

However, it added: “The board is confident that continued focus on the strengths of the Company, which include its long-standing customer relationships, breadth and quality of products, robust financial position and industry leading asset infrastructure, will support the further successful development of the group over the longer term.”

Global catering giant Compass Group (CPG) has released a trading update ahead of its AGM in London later this morning.

Compass said its organic revenue for the three months to 31 December 2018 grew by 6.9% driven by strong levels of new business wins, continued good retention rates and bolstered by the impact of the new UK Defence contracts and a positive sporting events calendar.

It also continues to generate efficiencies through its management and performance (MAP) programme to offset inflationary headwinds.

On a regional basis, organic revenue in North America increased by 8.0% with “very good” growth across all sectors, particularly in business & industry and sports & leisure.

In Europe, organic revenue grew by 6.4% reflecting continued momentum from new business wins, notably the significant impact of defence contracts in the UK mobilised in the second half of 2018, a beneficial Sports & Leisure calendar and continuing good growth in Continental Europe.

Organic revenue in Rest of the World increased by 2.8%, with ongoing good performance in developing markets partially offset by the run-off of the last offshore construction project in Australia.

Currency movements also had a positive translation impact on revenues and profit in the quarter of £107m and £10m respectively. If current spot rates were to continue for the remainder of the year, foreign exchange translation would positively impact 2018 revenue by £508m and operating profit by £43m.

Due to its “excellent” start to the year Compass now expects to be “slightly above the middle of our target 4-6% organic growth range for the full year” with “modest” margin progression.

“In the longer-term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue growth and margin expansion.”

Sucralose producer Tate & Lyle (TATE) has also issued a trading statement for the three months ended 31 December 2018.

It said group adjusted profit before tax in constant currency in the quarter was ahead of the comparative period, while the outlook for the year ending 31 March 2019 remains unchanged.

Its food & beverage solutions business “performed well” with volume growth in line with the first half. Volume growth in North America and Asia Pacific and Latin America showed continued momentum, while it focused on mix improvement in Europe, Middle East and Africa, we continued to focus on mix improvement.

Sucralose volumes were higher benefitting from a programme to optimise production at its facility in McIntosh, Alabama, and adjusted operating profit was slightly ahead of the comparative period.

However it saw weaker demand in North American sweeteners leading to lower volume and adjusted operating profit for its primary products division. The 2019 calendar year bulk sweetener pricing round is nearing completion with margins broadly in line with the prior year.

Guidance for the year ending 31 March 2019 remains unchanged, with growth in earnings per share in constant currency to be in a mid-single digit range, albeit towards the lower end due to energy and transport cost inflation in North America and a year of strong commodities performance in 2018.

Cider producer and drinks distributer C&C Group has announced three new non-exec directors will joins its board.

Jill Caseberry and Helen Pitcher have been appointed as independent non-executive directors with effect from 7 February 2019 and that Jim Thompson has been appointed as an independent non-executive director with effect from 1 March 2019.

Caseberry has marketing and general management experience across a number of blue chip companies including Mars, PepsiCo and Premier Foods. Pitcher is currently chair of the advisory board of Pladis Global, while Thompson is currently managing principal at Kingfisher Single Family Office and serves on the board of directors of Millicom International Cellular.

Geoffrey Hemphill and Richard Holroyd were stepping down from the board.

Stewart Gilliland, chairman of C&C, commented: “We are delighted that Jill, Helen and Jim are joining the board of C&C. They bring to the Board a wealth of experience and expertise, which will be invaluable to the group.

“The recent changes to the C&C Board ensure that it has the right balance of skills and experience for the long term development of the group. We are very grateful to Geoffrey, Joris and Richard for the individual contribution each has made to the group’s long-term development.”

On the markets this morning, Compass Group is up 4.5% to 1,772.5p, Cranswick has collapsed 20.4% to 2,359p, while Tate & Lyle shares have edged down 0.1% to 675.8p.

The FTSE 100 is flat at 7,170.2pts this morning.

Early risers include Hotel Chocolat (HOTC), up 1.5% to 330p, Total Produce (TOT), up 1.4% to 150p and Diageo (DGE), up 1.1% to 2,957p.

Fallers today include Ocado (OCDO), down another 7% to 900.8p, Stock Spirits Group (STCK), down a furhter 1.9% to 228p and DS Smith (SMDS), down 1.5% to 347.6p.

Yesterday in the City

The FTSE 100 finished the day edging down just 0.1% or 4 points to 7,173.1pts.

Ocado (OCDO), which is a 4%-plus share price bounce on Tuesday despite announcing an annual loss of more than £44m was a heavy faller yesterday after news of the fire at its Andover customer fulfilment centre was worse than they had previously thought.

The shares fell back 6.3% to 968.4p as firefighters struggled to contain the blaze, which has continued for more than 48 hours. Ocado said the fire will have a dampening effect on its UK sales as it will constrain capacity.

Elsewhere a recovery from recent falls in the pound helped supress the share price of a number of London-listed global fmcg firms.

Fallers included Reckitt Benckiser (RB), down 17% to 5,857p, British American Tobacco (BATS), down 1.7% to 2,733.5p, Diageo (DGE), down 1.4% to 2,925p, Unilever (ULVR), down 1.3% to 4,170, Imperial Brands (IMB), down 1.3% to 2,535.5p and Associated British Foods (ABF), down 1.2% to 2,380p.

Other fallers included Finsbury Food Group (FIF), down 2.9% to 83p, Greencore (GNC), down 2.5% to 195.6p, McBride (MCB), down 2.2% to 133p, Premier Foods (PFD), down 2.2% to 37.9p, Stock Spirits Group (STCK), down 2.1% to 232.5p and, ahead of this morning’s trading update, Tate & Lyle, down 1.7% to 676.2p.

Risers included Hilton Food Group (HFG), up 2.4% to 956p, FeverTree (FEVR), up 1.9% to 2,640p, Cranswick (CWK), up 1.4% to 2,964p and PZ Cussons (PZC), up 1.3% to 191.2p.