Finsbury Food: H1-2019|2020 Interim Results

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 26 weeks ended 28 December 2019.

Summary

• Group revenue up 4.7 percent to GBP 159.4 million (H1 2018: GBP 152.3 million) with UK Bakery sales up 5.8 percent.
• Group Ebitda*1 (adjusted) up 4.1 percent to GBP 13.5 million (H1 2018: GBP 12.9 million).
• Profit before tax up 17.9 percent to GBP 8.8 million (H1 2018: GBP 7.5 million).
• Basic EPS (GBPence per share) up 14.0 percent to 4.9 GBPence (H1 2018: 4.3 GBPence).
• Interim dividend per share increased 6.0 percent to 1.23 GBPence (H1 2018: 1.16 GBPence per share).
• The impact of the first-time adoption of IFRS 16 has been an increase in operating profit of GBP 0.2 million, an increase in interest costs of GBP 0.2 million, an increase in Ebitda of GBP 1.7 million and an increase in debt and assets of GBP 12.0 million.
• Net debt of GBP 32.6 million (excluding IFRS 16 debt), decreased by GBP 3.5 million (H1 2018: GBP 36.1 million) at 1.3 times annualised Ebitda of the Group (H1 2018: 1.3 times).

Strategic highlights

• Continued focus on driving productivity and efficiency
  • Integrated IT system embedded in all manufacturing sites (save for Ultrapharm)
  • Implementation of Group-wide review and standardisation of bakery processes leading to improved quality and reduction of waste
• Expanding capacity
  • 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
  • New Line of Harry Potter licensed cakes
  • Gluten free cakes
  • 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 GBP 1.7 million.

Chief Executive’s Commentary

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.»