Finsbury Food Group, which employs more than 1,000 workers at its Scottish facilities in Hamilton and East Dunbartonshire, is enjoying strong sales growth driven by the success of new products including a cake to tie-in with Disney’s box office smash film Frozen.
The group, which bought the Lightbody Cakes operation north of the Border in 2007, said the good trading performance seen throughout the Christmas period had continued, with total sales up by 24 per cent to £107.6 million in the first half of the financial year to 27 December.
Finsbury shares surged 4.25p, or 7.2 per cent, to close at 63.25p after it said “strong sales growth and continued momentum was helped by new products such as Disney Frozen cakes, popular Christmas seasonal ranges and increased promotional activity”.
In December, Frozen became the biggest animated hit of all time taking more than £800m at box offices around the world. More than three million copies of the film have been sold on DVD and Blu-Ray.
Finsbury’s export joint venture, Lightbody Stretz – which distributes the group’s UK manufactured products primarily to Europe – finished the first half strongly, reversing the 3.1 per cent decline reported for the first four months of the year.
Improvements in operating efficiencies from a capital investment programme and overhead reductions helped offset labour and general cost inflation, which the firm said had eased compared to recent years.
The acquisition in October of Fletchers – which makes items including buns, muffins, scones and baguettes at factories in London, Manchester and Sheffield – contributed £16m of additional sales revenue.
John Duffy, chief executive of Finsbury – whose customers include household names such as Tesco, Sainsbury’s and Morrisons – said: “The Fletchers acquisition, while still in the early stages of group integration, has shown very positive signs of growth and progress. In addition, our capital investment programme continues and has laid the foundation for the group’s positioning in a market experiencing industry-wide pressures.
“These factors, along with the benefits of being a larger, more diversified specialty bakery group, underpin our belief that the group is in a strong position.”
Finsbury bought Fletchers for £56m from private equity firm Vision Capital, which had acquired the business as part of a wider £160m deal with Northern Foods in 2007. Finsbury paid for the purchase through a share placing with institutional investors that raised £35m, as well as bank debt.
The enlarged operation is one of the biggest specialist bakery groups in the UK, with sales of more than £270m.
SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING