Finsbury plans to use windfall to fund acquisitions

CAKE and bakery goods firm Finsbury said yesterday that it may use some of the £21 million it netted by selling its gluten-free brand to Genius to make acquisitions of its own.

The Aim-quoted food group said the sale had transformed its balance sheet and allowed for “increased investment and merger and acquisition opportunities”.

It came as Finsbury – which bought Hamilton-based Lightbody Cakes in 2007 – reported a slight dip in sales across its remaining businesses. Revenue from continuing operations dipped £2.3m to £176.6m in the year to the end of June.

But underlying operating profit rose to £7.4m, from £7.2m a year earlier, and the firm re-instated its dividend with a proposed payout of 0.75p per share.

Chief executive John Duffy said: “These results signal the group’s shift from a transitionary period, to a new period of financial stability. Whilst a strategic disposal has driven this change, the company is trading maturely, paying down debt and generating cash.

“Growth remains our priority. Driving organic growth is one of our key focus areas whilst evaluating bolt-on acquisition opportunities.”

Finsbury employs more than 1,000 people at its Hamilton site, which bakes cakes under the Disney and Thorntons brands.

Under a £21 million deal announced in February, Edinburgh-based Genius bought the Livwell bakery in Hull and United Central Bakeries in Bathgate from Finsbury, along with its Free From brand. Genius was founded in 2009 by chef Lucinda Bruce- Gardyne, after her son was diagnosed with coeliac disease.