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Bear and Nakd owner Lotus Bakeries has posted 14.1% revenue growth in the first half of 2022 driven by strong growth of Lotus Biscoff and its UK healthy snacking portfolio.
Total revenues grew 14.1% to €416.8m in the six months to 30 June despite the global challenges of high inflation and slowing economic growth.
Volumes were up by 6.1%, while price increases (and positive exchange rate effects) drove 8% of total growth.
Its key ‘strategic pillars’ of Lotus Biscoff and Lotus Natural Foods, were up 17% and 30% respectively.
UK-focussed health snacking division Natural Foods made a strong recovery from the Covid pandemic, with 25% in the second half of 2021 which continued into 2022 with growth of 30%.
The division showed resilience against “necessary” price increases, with each brand in strong double-digit volume growth.
The division also saw strong growth outside the UK, with sales up more than 50% in the first half and now representing more than 30% of its total sales, driven by the growth of Bear in the US.
Recurring operating EBIT increased by €4.2m to €68.6m, “confirming the resilience of the group in the context of accelerated cost inflation”.
The group said that its first half performance “warrants the expansion and acceleration” of its investment programme, as it looks to expand its operations in Asia and the US.
“Realising its growth potential and ambitions remains the strategic priority for Lotus Bakeries,” it said.
“To sustain the continued increase of household penetration, it is crucial that the brands and products remain affordable for consumers [and] price increases are implemented in a fair and transparent way.”
CEO Jan Boone commented: “The strategic foundations of our company remain intact despite the global challenges in the short term and allow us to realise the exceptional growth potential for both Lotus Biscoff and Lotus Natural Foods in the years to come.
“The first half of the year once again proves that to be true. We’ve growth by more than €50m in just six months. And the level of operational cashflow that was generated allowed us to invest more than €100m in the last 12 months while maintaining a low level of net financial debt.
“It took a lot of effort and follow-up of everybody, but it’s crucial that the urgently needed capacity extensions for Biscoff in Belgium and the US will be operational by the end of 2022 in spite of global supply chain disruptions and cost inflation. This guarantees the continued growth in 2023.”
Morning update
AIM-listed premium beverages producer East Imperial has signed a long-term distribution agreement with Wen Hua Hang Wine Spirits Company, one of the largest distributors in China to supply its entire range across the Chinese Mainland and Macau.
East Imperial is already an established brand in China with its premium range of mixers and the WHI distribution partnership will enable East Imperial to continue to build its presence at the luxury hotel end of the market while also focusing its strategy on supplying local premium customers.
With almost 20 years of experience in building an extensive network of close relationships with the local Chinese luxury markets, WHI has assisted in distributing and growing global brands such as Pernod Ricard in Mainland China and Macau.
APAC continues to be the cornerstone of East Imperial’s revenues in the short to medium term, with the region forecasted to contribute almost 60% of sales in 2022.
Tony Burt, CEO & Founder of East Imperial, said: “Today’s announcement represents an important milestone for East Imperial, as the partnership with WHI enables us to supercharge our focus on the premium drinks market in China. We have spent the past six months working closely with members of our advisory board who have a deep knowledge of this important market, and we are proud to be able to tailor our offer based on this.
“The distribution deal with WHI offers us a fantastic opportunity to grow in the premium Chinese market and consolidate our market share in the valuable APAC region. We are a company born out of the East, and it remains the cornerstone of our identity and a market to which we are fully committed. I am incredibly excited to bring our products to the discerning Chinese consumer and look forward to working with WHI as we put into practice our strategy for growth.”
Jason Ieong, CEO of WHI, said: “As one of the leading distributors in China, we are pleased to work with premium brands like East Imperial, and we are delighted that the company recognises the value that WHI can bring to their brand, especially with our deep expertise in the premium segment. We are proud to offer East Imperial’s products, which are steeped in tradition, authenticity and originality, to customers in China, and we look forward to a mutually rewarding partnership with them.”
On the markets this morning, the FTSE 100 has started the day up 0.5% to 7,501.8pts.
Early risers include WH Smith, up 1.9% to 1,506.4p, Greencore, up 1.9% to 100.7p and Nichols, up 1.8% to 1,165p.
Fallers so far this morning include Bakkavor, down 4.1% to 97.1p, Glanbia, down 4.1% to €11.49 and Coca-Cola HBC, down 0.8% to 2,030p.
Yesterday in the City
The FTSE 100 dropped 0.6% yesterday to 7,465.9pts.
Haleon was one of the day’s major fallers, dropping 4.9% to 265.8p on concerns over its legal exposure to GSK drug Zantac amid health concerns.
Coca-Cola HBC was up 3.3% to 2,047p yesterday after posting first half organic growth of 19.4% as double-digit price rises and volume growth mitigated the loss of business in Russia and Ukraine.
The days fallers included Marks & Spencer, down 4.3% to 136.3p, WH Smith, down 3.1% to 1,478.5p, B&M European Value Retail, down 2.9% to 412.6p, Pets at Home, down 2.8% to 352.4p, DS Smith, down 1.9% to 293.3p and FeverTree, down 1.8% to 1,011p.
The day’s risers include McBride, up 5.1% to 18.2p, Devro, up 4.8% to 194.8p, Coca-Cola HBC, up 3.3% to 2,047p, Just Eat Takeaway.com, up 3.3% to 1,510p, THG, up 3.1% to 69p and Virgin Wines, up 2.9% to 70.5p.
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