FINSBURY Food Group, owner of Scottish cakes manufacturer Lightbody, is looking to swallow more rivals after reaping the benefits of two significant acquisitions last year.
The Cardiff-based company saw sales rise by just under 46 per cent to £256.2 million in a year during which it bought East Kilbride-based Johnstone’s Just Desserts from administrators as well as swallowing up Sheffield-based bakery group Fletchers.
The company, whose Hamilton-based Lightbody arm employs more than 1,000 people, said the success of themed products tied-in to films such as Frozen and Minions had also helped boost like-for-like sales by 6 per cent in the year to 27 June. Profits before tax rose by 76 per cent to £11.4m.
Chief executive John Duffy said he saw further opportunities to buy up competitors in a market where it was becoming harder for smaller firms to survive against a backdrop of an uncertain economic outlook, limited consumer budgets and the continuing rise of discount retailers.
“Scale becomes important. If you’re up against a well-run, well-invested larger business. It’s increasingly hard to compete in the area of food,” he said.
Duffy said a number of small food businesses had gone into receivership and that he saw opportunities for the firm to make further acquisitions. Finsbury, which now employs more than 3,000 people, bought Fletchers last October for £56m and Johnstone’s, which employs about 150 producing cakes for national coffee shop chains, from administrators in June this year.
Duffy said: “The past year has been truly transformational. Building on our organic growth, the acquisitions in the period have diversified the group into new channels and widened our customer base.”
Chairman Peter Baker said: “Finsbury Food has undergone a transformation. We have gone from being a relatively small group with challenges, effecting a turnaround of the core and emerging to become a group with an annualised turnover close to £300m. We still have aspirations and the capabilities to grow further.”
Baker said that the introduction of the national living wage presented a challenge for the company.
“As with other businesses in our market, expenditure on employment is a high proportion of our costs by comparison with many other industries and this change is potentially inflationary. Adjusting and mitigating the impact will take time and will require ever-greater focus on efficiency improvements and cost reduction programmes.
Lightbody is the UK’s largest supplier of celebration cakes and has deals in place with film studios Disney and Universal as well as Thorntons and Weight Watchers.