Finsbury Food Group cooks up tasty 40 per cent profit growth with the help of artisan breads and Disney cakes
Profits were up a tasty 40 per cent last year at cake and bread supplier Finsbury Food Group, as demand for premium breads and Disney celebration cakes pushed up growth.
The figures
Group revenue rose 25 per cent to £319.7m in the year ended 2 July, while adjusted operating profit grew 38 per cent to £17.1m.
Finsbury announced a final dividend per share of 1.87p, taking the total dividend for the year to 2.8p – a 12 per cent increase year-on-year.
Read more: Strong start for Finsbury after bumper deal
Adjusted earnings per share at the specialist baker, which supplies retailers such as Waitrose and Asda and coffee shops such as Costa, grew 19 per cent to 9.5p per share.
Finsbury's share price was up 0.4 per cent in late-afternoon trading to 136p per share.
Why it's interesting
Premium products such as artisan breads and its licensed celebration cakes boosted growth over the year, with its Disney licence paying off in the form of strong Minions cake sales.
Chief financial officer Steve Boyd told City PM the casual dining sector, including coffee shops and restaurants, was a major growth sector for the company.
He said the company, which remains acquisitive, could eye up takeovers in the food service sector in the near future, but will steer clear of the large and growing free-from market.
Finsbury was one of the first players in the gluten-free segment, but sold its business to Genius for £21m in 2013.
Read more: Cake maker Finsbury Food posts sweet performance
An agreement with Genius not to re-enter the sector expires next February, though even this has not been enough to lure the company back to the gluten-free world.
"We are not planning to go back to the free-from sector, it's just not the thing you would do when you've exited that market," Boyd said.
What Finsbury said
Chief executive John Duffy said:
If 2015 was all about transformation for the group, then 2016 has been about delivering on our growth strategy and moving even closer to our vision of building the leading speciality bakery group in the UK focused on quality products.
There has been significant top and bottom line growth, as a result of considerable efforts across the whole company. The integration of Fletchers and Johnstones has been one of our priorities, and we continue to invest across all aspects of the business, diversifying into new channels and widening our customer base, to deliver a stronger platform for future growth and ensure our long-term competitiveness.