Finsbury Food: Announces Preliminary Results 2011

London / UK. (ffg) Finsbury Food Group PLC, a leading manufacturer of cake, bread and gluten free bakery goods, announces its preliminary results for the year ended 02 July 2011. Highlights:

• Group revenue up 12,6 percent to 189,6 million GBP (2010: 168,3 million GBP)
• Adjusted profit before tax up 8,3 percent to 5,8 million GBP (2010: 5,4 million GBP)
• Cake division returns to growth with sales increasing by 12,1 percent to 139,6 million GBP (2010: 124,6 million GBP)
• Bread + Free From sales growth of 14,2 percent to 50,0 million GBP (2010: 43,7 million GBP) from investment behind Vogels and ongoing growth in the fresh Free From product range with Genius and own label
• Adjusted diluted earnings per share 0,071 GBP (2010: 0,070 GBP)
• Total net bank debt reduced by 10,4 percent to 32,7 million GBP at the year end (2010: 36,5 million GBP)
• Banking facilities with HSBC extended to 2017
• Discounted deferred consideration reduced by 28,3 percent to 4,3 million GBP at year end (2010: 6,0 million GBP)
• Strong organic growth across all divisions, despite the exceptional impact of commodity and cost inflation

Operational highlights: Licensed brand growth across all divisions; working with Genius Foods Limited to expand the Free From product portfolio; re-launch of Vogel´s speciality bread brand; adding Disney small cakes to our licensed portfolio.

Commenting on the results, Chief Executive John Duffy said:

«We are pleased to have returned to organic growth, an important milestone for the group. We are emerging from a complex and exhaustive programme of reorganisation and despite the macro economic factors continuing to buffet the business and our customers, our structured approach has clearly started to bear fruit. The difficulties we face should not be underestimated, the global commodities bubble has exerted unprecedented pressure on margins. Prices for butter, sugar and wheat have soared over the last 18 months. Keeping things affordable for customers is essential. I am delighted that the company has succeeded in steering the Group through another demanding year. The reality is that testing times still lie in wait. However, our distinctive range of products, commitment to value and robust performance in a testing climate bode well for the challenge ahead».

Commenting on the results Non-Executive Chairman Martin Lightbody said:

«Tough times demand a resilient mindset. Toughness combined with appetite for the challenge, commitment to hard work and uncompromising dedication to the task».

«All these qualities, and a good deal more, have been widely in evidence at Finsbury Food Group over the past year. Together, the combination has generated a trading performance that provides quiet cause for satisfaction and real grounds for encouragement going forward».

«I am delighted to report a 12,6 percent rise in group revenues over the current year and an eight percent increase in underlying profit before tax. In a value-focused recessionary environment, growth has returned to our cake business. Double-digit growth in our speciality bread and free from businesses confirm that even in a recessionary period, consumers are prepared to pay for quality».

«Investment in people has provided the lynchpin. Over the last few years, Finsbury Food Group has invested heavily in category management, new product development personnel and marketing skills. That investment has helped to create a far-reaching insight into our customers and an increasingly compelling series of offers in the marketplace».

«It is our stated intention to help consumers through the recession. Doing so demands continual focus on options and choice, whether in the form of optional treats, celebration birthday cakes or lower cost items for lunch boxes. Innovation and adaptability are paramount».

«Input price inflation is clearly a matter of concern, particularly in such a low margin industry. Commodity prices for sugar, flour and butter have reached record levels and have inevitably impacted on our operating margins. Rising sales together with savings from efficiency projects have largely offset the impact of commodity price inflation but recouping costs has become an imperative».

«After a period of far-reaching change in the boardroom, a stable year has enabled individuals to get on with the jobs they were brought in to do. I firmly believe the results we are seeing reflect not only that degree of stability but also the completion of the integration programme that has occupied so much time and resource over the last three years».

«Progress extends beyond statistical growth. I am also pleased to report that we are continuing to pay down debt, cash flow remains healthy and Ebitda figures bear out our operational durability».

«The group recently renegotiated our banking facilities with HSBC. This enables us to adjust for growth and provides cash to cover deferred consideration due throughout the year. HSBC have effectively broadened their debt profile with Finsbury Food Group, underlining their continued confidence in the business. HSBC´s support is greatly appreciated».

«Further obstacles must be overcome. Consumer confidence remains fragile, disposable incomes are under threat, public sector cuts have yet to be fully implemented – all factors potentially suppressing demand still further. The reality is that the next twelve months are likely to prove testing but our track record in resisting recessionary influences has been exemplary thus far».

«I would like to take this opportunity to express my thanks to my fellow Directors as well as members of staff across the Group. Our trading results bear witness to the collective pride of performance and sense of ownership that drives our business. Scale benefits from the Group we´ve constructed are founded upon a philosophy of continuous improvement. Getting better in what we do every single day is the focus of conversation».

«Another challenging year lies ahead. However, Finsbury Food Group has already demonstrated a level of resilience greater than many would have anticipated. Our course is set. We shall continue to strive to improve profitability, pay down debt, reinstate the dividend and nurture the growth of our businesses».

«When the time is right and economic circumstances permit, your board will seek out the acquisitions aimed at furthering the pace of growth. Until such times, we will continue to pursue the growth and efficiency model of recent years, building upon the foundations already secured».

About: Finsbury Food Group PLC is a leading manufacturer of premium and celebration cakes, low fat cake slices and artisan, organic and gluten free bread and morning goods. The company is the second largest manufacturer of Ambient Packaged Cake (excluding ISB) in the UK, a market valued at 886 million GBP (Source: Kantar Worldpanel Total UK Coverage, July 2011). The Group is also the market leader in the supply of gluten free baked goods to the UK´s multiple grocers. The Group´s strategy is to generate returns for shareholders by building a crafted bakery group focused on premium, celebration and well being that delivers for customers and consumers.