Lees, Lees, more if you please, as confectioner's sales jump 13%

SCOTTISH confectioner Lees Foods has reported a 13 per cent increase in sales in 2009, after the ousting of its chairman and a successful out-of-court settlement with the firm that sold it a failed business.

Shares in the Coatbridge group were up almost 9 per cent after it said its "record" 18.2 million sales for the year had been 5 per cent ahead of forecast.

Chief executive Clive Miquel said in a trading update that the sales increase had been boosted by new products and reformulating existing ones with new packaging.

The firm, which makes coconut snowballs, macaroon bars and meringues, also expects pre-tax profits to be "well ahead" of market expectations.

Last month, Lees announced it had settled a long-running dispute with the former directors and shareholders of Rock Cake, from whom it bought the Patisserie UK business in 2007.

Lees paid 1.2m for Patisserie UK but was forced to put the business into administration less than 18 months later after the division lost a major customer – taking 75 per cent of its sales with it and resulting in the loss of 41 jobs. Lees launched a legal action against Rock Cake managing director John Roden and operations director Ian McMillan, which resulted in the recent agreement.

The "amicable" deal resulted in Lees accepting a 225,000 payment in cash and shares. As the transaction requires shareholder approval, a general meeting has been called for 25 January to approve the buy-back of shares worth 100,000 for a nominal sum.

Clive Miquel, who succeeded his father Raymond as chief executive in a boardroom coup last year, said: "In the current economic climate, our strategy has been to focus on our core operations, and this, combined with the development of new products allowing us to sell into new product categories, has resulted in a record year for sales at Lees."

Former chairman Raymond Miquel, who rescued the business with a buyout in 1992, stepped down unexpectedly in September after what was described at the time as a "board decision" and a "difference of opinion regarding the direction of the company".

It was understood Miquel snr was keen to make a sizeable acquisition to diversify the group, which wasn't supported by the board. He retains a 5 per cent shareholding in the group.