Revenue from Finsbury Food's (FIF) UK bakery division slipped 2.9 per cent during the first half of the financial year. That doesn't look good at face value, but it needs to be seen in context of the challenges to the wider industry. Figures from IRI Infoscan show that volumes in the UK grocery cake market contracted by 4.8 per cent, leading to an overall value decline of 1.5 per cent year on year, while analysis from Kantar Worldpanel points to 0.6 per cent volume growth in the bread and morning goods market, although representative value also pulled back marginally.
Finsbury, like many of its competitors, is suffering as supermarkets change the way they run promotional offers. But a close eye on operating efficiencies - as well as accrued benefits from several capital expenditure investments - means margins in the UK bakery business rose from 5 to 5.3 per cent, boosting operating profit in the process. The same strategy will continue in the face of commodity price increases, wage inflation and unfavourable foreign exchange translations. That said, the group's overseas business - which acts as an export channel from the UK to Europe - actually benefited from the exchange rate environment.
Panmure Gordon expects pre-tax profit of £17.1m for the year ending June 2017, giving EPS of 9.9p, compared with £16.5m and 9.7p in FY2016.
| FINSBURY FOOD (FIF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 113p | MARKET VALUE: | £147m | |
| TOUCH: | 112-114p | 12-MONTH HIGH: | 139p | LOW: 103p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 79p* | NET DEBT: | 20% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 157 | 7.5 | 4.4 | 0.93 |
| 2016 | 157 | 7.9 | 4.8 | 1.00 |
| % change | - | +5 | +9 | +8 |
Ex-div: 30 Mar Payment: 21 Apr *Includes intangible assets of £77.3m, or 59p a share | ||||
