Finsbury Food Group Plc (AIM: FIF), a leading UK speciality bakery manufacturer of cake, bread and morning goods for the retail and foodservice channels, is pleased to announce its unaudited interim results for the 26 weeks ended 28 December 2019.
· Group revenue up 4.7% to £159.4m (H1 2018: £152.3m) with UK Bakery sales up 5.8%.
· Group EBITDA*1 (adjusted) up 4.1% to £13.5m (H1 2018: £12.9m).
· Profit before tax up 17.9% to £8.8m (H1 2018: £7.5m).
· Basic EPS (pence per share) up 14.0% to 4.9p (H1 2018: 4.3p).
· Interim dividend per share increased 6.0% to 1.23p (H1 2018: 1.16p per share).
· The impact of the first-time adoption of IFRS 16 has been an increase in operating profit of £0.2m, an increase in interest costs of £0.2m, an increase in EBITDA of £1.7m and an increase in debt and assets of £12.0m.
· Net debt of £32.6m (excluding IFRS 16 debt), decreased by £3.5m (H1 2018: £36.1m) at 1.3 times annualised EBITDA of the Group (H1 2018: 1.3 times).
· Continued focus on driving productivity and efficiency
o Integrated IT system embedded in all manufacturing sites (save for Ultrapharm)
o Implementation of Group-wide review and standardisation of bakery processes leading to improved quality and reduction of waste
· Expanding capacity
o Opening of new gluten free bakery in Poland to expand capacity for the continental market.
· Further innovation in line with consumer trends with the launch of
o New Line of Harry Potter licensed cakes
o Gluten free cakes
o Artisan sourdough breads
· Product excellence illustrated by the winning of several Quality Food and Drink ‘Q’ Awards
The Group uses certain Alternative Performance Measures (APMs) which are non-IFRS measures to monitor performance of its operations and of the Group as a whole. The reconciliation to IFRS measures is shown in the Consolidated Statement of Comprehensive Income.
*1 EBITDA is before significant non-recurring, other items (Note 2) and first-time recognition of IFRS 16 leases (Note 1) which increases EBITDA by £1.7m.
Commenting on the results, John Duffy, Chief Executive of Finsbury Food Group Plc, said:
“The first half was both a period of growth and of successful delivery against our strategic priorities. Revenue and profit were up, largely driven by organic performance in UK Bakery as well as new business wins and the first full six-month contribution from our Free From business. We made encouraging progress in the optimisation of our cash flow in the period and reduced our debt levels, and are pleased to announce a further increase in the dividend.
Moving into the second half, while the macroeconomic pressures affecting the industry look set to continue, our long-term, consistent and disciplined approach to investment and unwavering focus on driving increased productivity and efficiency across the Group means Finsbury is now a much more resilient business and better equipped to weather difficult trading conditions.
The broad channel, customer and product diversification we now have in the business gives us a solid platform on which to build and we continue to benefit from access to higher growth opportunities such as Free From and consumer niches such as artisan bread. Notwithstanding the ongoing market-wide headwinds, there is positive sales momentum in the business and a growing number of exciting opportunities that gives us confidence in Finsbury’s prospects for the full year, which remains in line with expectations.”