Aim-traded confectionery and snacks food group Zetar performed strongly in the first half of last year, but major retailers under-stocking for Easter hit the second-half figures with the net result that adjusted pre-tax profits for the year to April declined from £6.7m to £5.5m.
But the company is recovering strongly and in the first 11 weeks of the current financial year revenues are up by 7 per cent excluding an extra £1.5m of sales of Olympic-related products. In fact, Zetar is targeting record sales this year and analysts at Merchant Securities expect underlying EPS to bounce back to 39.5p, up from 33.8p in the year just ended, based on pre-tax profits of £6.7m. Moreover, underpinned by strong cash flow, a 33 per cent hike in the dividend was higher than analysts had expected.
To derisk the business, Zetar has been reducing reliance on seasonal sales around peak periods, such as Easter and Christmas, and low-margin snack products by increasing sales of higher-margin everyday (all year round) lines. This explains the fall in sales in the natural snacks division as Zetar exited from much of the retailer own-branded snack nut segment of the market in order to invest in more profitable branded products.
| ZETAR (ZTR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 215p | MARKET VALUE: | £28.6m | |
| TOUCH: | 208-219p | 12-MONTH HIGH: | 253p | LOW: 167p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 354p* | NET DEBT: | 23% | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 106 | 4.75 | 29.5 | nil |
| 2009 | 119 | 2.01 | 6.60 | nil |
| 2010 | 132 | 5.97 | 32.6 | nil |
| 2011 | 135 | 5.64 | 35.1 | 2.25 |
| 2012 | 128 | 2.85 | 15.6 | 3.00 |
| % change | -5 | -49 | -56 | +33 |
Ex-div: 3 Oct Payment: 2 Nov *Includes intangible assets of £30m, or 228p a share | ||||
