London / UK. (ffg) British Finsbury Food Group PLC, a leading UK speciality bakery manufacturer of cake, bread and morning goods for both the retail and foodservice channels, is pleased to announce its unaudited interim results for the six months ended 26 December 2021.
Financial highlights
The H1 2021 performance reflects strong revenue growth in Foodservice, Retail and our Overseas business in a comparative period impacted by Covid-19 with varying degrees of disruption and an environment of substantial inflationary pressure. The Group’s successful price recovery and mitigating actions will be reflected in the second half’s profitability.
- Group revenue up 9 percent to GBP 166.5m (H1 2020: GBP 152.9m), representing a record half year sales performance.
- Group Ebitda*1 GBP 11.9m (H1 2020: GBP 13.1m).
- Profit before tax GBP 5.7m (H1 2020: GBP 7.4m), reflecting the impact of inflationary pressures.
- Basic EPS (pence per share) 3.2p (H1 2020: 4.1p).
- Net bank debt reduced to GBP 12.9m (excluding IFRS 16 debt), representing 0.5 times annualised Ebitda of the Group (H1 2020: GBP 21.5m).
- Reinstatement of dividend at 2.4p for the year ended 26 June 2021, paid in December 2021.
- 0.83p interim dividend proposed to be paid on 21 April 2022.
Strategic highlights
- Robust volumes drove revenue growth, up 9 percent against the corresponding period in the prior year reflecting:
- a continuation of the strong recovery in UK foodservice, up 26 percent,
- UK retail up 1.5 percent, and
- 32 percent growth in our Overseas division.
- Innovation in Gluten Free recipes and product quality which is driving organic growth in both the UK and in Europe.
- Operating Brilliance Programme continues to drive significant operational efficiency helping, in the short term, to recover inflationary pressure.
- Clear sustainability agenda backed by science based targets driving continued improvement in energy and waste management.
- Continued investment in development, engagement and the health and wellbeing of employees.
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 1) and after including the impact of IFRS 16.
Chief Executive’s Commentary
Commenting on the results, John Duffy, Chief Executive of Finsbury Food Group Plc, said: «We are pleased to have been able to deliver a record revenue performance in the first half, a demonstration of Finsbury’s resilience and strategic focus. We are now a stronger and more united business than ever before and continue to reap the benefits of our Operating Brilliance Programme which have been one of the key drivers behind the positive performance.
«We have not been immune to the challenges arising from sudden and unexpected input cost inflation over the period. However, we have been able to mitigate the impact of these pressures through commercial negotiation and operational improvements and will see the benefit of these actions in our second half profit performance. We have also been affected by staff shortages and supply chain disruption and would have been able to supply extra demand for our products and deliver further revenue growth had it not been for these external factors; a positive sign for the future of our business as these issues begin to ease. In the second half, we will continue to monitor closely and work through ongoing pressures using the same strategies employed to date. While headwinds are set to persist, we have a successful track record of navigating challenging market conditions, and the steps we have taken to optimise the business to date stand us in good stead.
«With the recovery in foodservice, steady sales in retail and strong overseas performance set to continue, and with the benefits of the decisive mitigation actions taken in the first half set to largely benefit our bottom line in the second, we expect to deliver a full year result in line with market expectations. We continue to see opportunities for significant sales growth through gaining market share in existing areas, and targeted acquisitions, (both bolt on and transformational). We apply strict acquisition criterion including valuation as well as ensuring a clear strategic fit that will typically either accelerate market consolidation in our core product areas or further diversify the business through new product, category, customer, channels by geography.
«The announcement of our increased holding of our French subsidiary to 85 percent reflects our continued desire to invest behind our European growth and is underpinned by the Company’s proven ability to create value through acquisition. The Board is eager to grow the Group both in the UK and in Europe and will look to meaningful acquisition to achieve its objectives.»
