Finsbury Food: Announces H1-2022|2023 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 six months ended 31 December 2022.

Financial highlights

• Group revenue up 14.7 percent to GBP 190.9 million (H1 2021: GBP 166.5 million).
• Operating profit*1 flat at GBP 6.5 million with operating profit margin mainly reflecting the impact of inflationary pressures.
• Group Ebitda*1 GBP 12.0 million (H1 2021: GBP 11.9 million).
• Profit before tax GBP 6.1 million (H1 2021: GBP 5.7 million).
• Basic EPS (pence per share) 3.7p (H1 2021: 3.2p) and 0.87p per share interim dividend proposed to be paid on 20 April 2023 (0.83p 21 April 2022).
• Net bank debt GBP 22.8 million (excluding IFRS 16 debt), representing 0.8 times annualised Ebitda of the Group (YE 22: GBP 20.6 million). GBP 120 million facility: GBP 60 million RCF and GBP 60 million accordion since last year.

Strategic highlights

• Revenue growth driven by price recovery initiatives on broadly flat Group volumes resulting in:
  • UK foodservice, up 22.0 percent;
  • UK retail up 10.9 percent; and
  • Overseas division growth up 23.4 percent.
• Post-period acquisition of Lees Foods Limited on 30 January for a consideration of GBP 5.7 million, expected to be immediately earnings enhancing and in line with our previously disclosed M+A strategy.
• Continue to enhance product capability and capacity with a new buns and rolls line in our Sheffield factory completed during the period.
• Innovation in gluten-free recipes and product quality which is driving organic growth in both the UK and in Europe.
• Sustainability Forum is now fully established to aid the governance of our Sustainable Approach, driving continued improvement in energy and waste management.

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. Operating Profit and Ebitda is before significant non-recurring and other items.

Current Trading And Outlook

Finsbury delivered an encouraging H1 performance and the Company is seeing steady demand for its product range whilst also continuing to make good progress on the Group’s three strategic pillars of Excellence, Growth and Responsibility.

As predicted, the macro-economic challenges that the Company has been faced with recently continue to persist. The focus remains on managing these challenges through commercial terms, operational improvements and other supply chain and overhead initiatives.

Whilst the external environment remains challenging, Finsbury has a strong market position, a carefully calibrated M+A strategy and a track record of successfully navigating macro challenges as they arise, which positions the Group well for the medium to long-term. The Group remains on track to meet market expectations for FY23.

Chief Executive’s Commentary

Commenting on the results, Chief Executive Officer John Duffy said: «Finsbury has once again delivered a robust performance in the first half to December 2022. We have seen a stable performance in UK retail, ongoing recovery in UK foodservice and continued growth in our Overseas division all despite the challenges of continued significant input cost inflation and falling consumer confidence. I would like to thank the whole team for their hard work and dedication which underpins this resilient performance.

«We have continued to make good progress against our objectives, based around our three strategic pillars of Excellence, Growth and Responsibility and underpinned by our Operating Principles. Post period, we were delighted to announce the strategic acquisition of Lees Foods Limited, which enables us to further develop our position in the sweet treats sector and grow our manufacturing presence in Scotland.

«Looking ahead, we expect to continue to navigate a challenging macro environment as inflationary pressures look set to persist with the short-term outlook remaining difficult to predict. However, Finsbury is now a nimble and adaptable Group and I am confident that we remain well placed to continue successfully executing on our strategy.»