In January, Finsbury Food Group (FIF) had warned that sales in the first half would fall short of the comparable period in FY2018. Indeed, total sales fell 3.5 per cent to £152m, though they were up 0.5 per cent on a like-for-like basis. The decline stemmed from the UK bakery division, where revenue fell 5 per cent to £133m due in part to the loss of revenue from the closure of the Grain D’Or bakery business. These closed bakeries were loss-making, so operating profit for the period increased by 0.6 per cent to £7.4m with an increase in margin from 5.2 per cent to 5.5 per cent.
Cost inflation faced by the group has persisted. First it was butter that was getting more expensive, now it’s flour. The National Living Wage has added to labour costs, and green levies on energy bills increased the cost of utilities. Chief executive John Duffy said the group has put through some price increases to help offset these added costs, and the group is using some hedging strategies such as forward buying to address commodity prices.
Analysts at Panmure Gordon expect pre-tax profits of £16.8m during the year to June 2019 giving EPS of 8.9p, compared with £17.9m and 9.8p in FY2018.
| FINSBURY FOOD GROUP (FIF) | ||||
| ORD PRICE: | 81p | MARKET VALUE: | £105m | |
| TOUCH: | 79-82p | 12-MONTH HIGH: | 131p | LOW: 79p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 80.7p* | NET DEBT: | 33% | |
| Half-year to 29 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 158 | -1.22 | -1.40 | 1.10 |
| 2018 | 152 | 7.49 | 4.30 | 1.16 |
| % change | -3 | - | - | +5 |
| Ex-div: | 04 Apr | |||
| Payment: | 26 Apr | |||
| *Includes intangible assets of £95.3m, or 73p per share | ||||
