“Free From” items are the future focus.
Finsbury Foods bake up some goods with a rise in revenues
- Finsbury Foods report 2.4% increase in full-year like-for-like sales and a 4% increase in pre-tax profits
- Net debt fell 10.5% and the dividend increased by 10%, however the shares fell flat in response to the morning report
- We continue to recommend Finsbury Foods as a ‘buy’ for higher risk investors seeking growth
As Finsbury Food Group updates the market, Ian Forrest investment research analyst at The Share Centre, explains what this means for investors:
Bakery group Finsbury Food reported a 2.4% increase in full year like-for-like revenue today to £290.2m. Adjusted pre-tax profits, which strip out one-off items, rose 4% to £17.2m and net debt fell 10.5%. The company has had to close a number of bakeries during the year and is coping with sharp rises in commodity and labour inflation, but it said today that it expects steady organic growth in future and is increasingly focused on “free from” bakery items. It launched a new “free from” brand in Europe and announced the purchase today of a gluten-free bakery, Ultrapharm, for £17m.
The shares have outperformed the market so far this year but remained flat in response to today’s news. These are good figures and show that while the company has had to make some changes and is facing a challenging market in some respects it is adapting to new trends such as free from. The dividend was raised 10% and we continue to recommend the shares as a ‘buy’ for higher risk investors seeking growth due to the potential for the UK and European businesses, diverse customer base and good relative value.
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