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Finsbury Food Group has posted an “encouraging” first half performance as pricing drove revenue growth and profits were flat as margins reduced due to cost inflation.
The speciality bakery manufacturer of cake, bread and morning goods posted group revenue growth of 14.7% up to £190.9m in the six months to 31 December.
The growth reflected price increases to recover input cost inflation on broadly flat sales volumes.
UK foodservice sales bounced back following the reintroduction of some Covid restrictions in winter 2021, up 22%.
UK retail sales were up 10.9% and overseas sales were up 23.4%.
Overall operating profits were flat at £6.5m, with operating profit margin mainly reflecting the impact of inflationary pressures.
Group EBITDA increased marginally to £12m from £11.9m.
Its UK Bakery division, which supplies grocery and foodservice, was up by 13.2% to £161m driven by pricing initiatives. Its operating profit of £4.8m increased, however the reduced operating margin “reflects the recovery of inflation challenge”.
Finsbury said its first half performance was “encouraging” and the group is seeing steady demand for its product range.
However, the macro-economic challenges that the company has been faced with recently “continue to persist”, with the group focusing on managing these challenges through commercial terms, operational improvements and other supply chain and overhead initiatives.
Finsbury said, thanks to its strong market position, successful track record of navigating economic challenges and “carefully calibrated” M&A strategy, it remains on track to meet full year market expectations.
CEO John Duffy commented: “Finsbury has once again delivered a robust performance in the first half to December 2022. We have seen a stable performance in UK retail, ongoing recovery in UK foodservice and continued growth in our Overseas division all despite the challenges of continued significant input cost inflation and falling consumer confidence. I would like to thank the whole Finsbury team for their hard work and dedication which underpins this resilient performance.
“We have continued to make good progress against our objectives, based around our three strategic pillars of excellence, growth and responsibility and underpinned by our operating principles. Post-period, we were delighted to announce the strategic acquisition of Lees Foods Limited, which enables us to further develop our position in the sweet treats sector and grow our manufacturing presence in Scotland.
“Looking ahead, we expect to continue to navigate a challenging macro environment as inflationary pressures look set to persist, with the short-term outlook remaining difficult to predict. However, Finsbury is now a nimble and adaptable group and I am confident that we remain well placed to continue successfully executing on our strategy.”
Finsbury shares are down 2% this morning to 97.1p on the news.
Morning update
Carr’s, the speciality agriculture and engineering group, has posted a trading update for the year ended 3 September 2022.
It said revenue from continuing operations increased 3.3%, while adjusted profit before tax from continuing operations increased 8%.
It reported operating profit from continuing operations in line with the prior year at £8.2m.
It said trading in the early part of the current financial year was strong, but became more challenging in November and December 2022, with lower volumes of feed blocks sold in both the US and UK markets and very competitive pricing for tenders in the engineering division.
At this stage of the year, the board remains of the view that trading for the full year will be in line with its expectations.
Meanwhile it said Martin Rowland will join the board as a non-executive director, effective 6 March 2023.
Rowland is appointed as a representative of Harwood Capital Management Limited, pursuant to a relationship agreement between the company and Harwood.
Rowland shall be entitled to remain on the board provided that Harwood retains an aggregate interest of at least 5% of the company’s issued ordinary share capital. As at the date of this announcement, Harwood held an aggregate interest of 6.04% of the company’s stock.
On the markets this morning, the FTSE 100 is up 0.7% to 7,961.3pts.
Early risers include Bakkavor, up 3.5% to 112p, Glanbia, up 1.7% to €11.49 and Kerry Group, up 1.3% to €93.22.
Along with Finsbury Food Group, fallers include Just Eat Takeaway.com, down 2.7% to 1,854.4p and Ocado, down 1.9% to 617.4p.
Yesterday in the City
The FTSE 100 closed at over 8,000pts for the third day in a row, rising 0.1% to 8,014.3pts to start the week.
Risers included Hilton Food Group, up 4.6% to 711p, McBride, up 2.4% to 23.2p, Greencore, up 2% to 78.6p, C&C Group, up 1.3% to 150.8p, Fever-Tree, up 1.2% to 1,113p and AG Barr, up 1.1% to 550p.
Fallers included packaging firm DS Smith, down 4.9% to 336p, SSP Group, down 2.3% to 260.8p, WH Smith, down 1.7% to 1,685p, THG, down 1.5% to 59.9p and Deliveroo, down 1.5% to 90p.
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