It was a year marked by rising costs for Finsbury Food (FIF) due to a combination of more expensive ingredients, weak sterling and the impact of the national living wage. Management has been diligent in mitigating the effects by putting through price increases during the second half of the year and scaling back promotions. Around £40m has been spent over the past year to make the business more efficient by adding robots to the production line and updating the IT platform. This helped to lift the operating margin from 5.3 per cent to 5.5 per cent, while adjusted operating profit rose 4.2 per cent to £17.4m.
Management recently announced the intention to sell the Grain d’Or business that it acquired two-and-a-half years ago. Over the past year that business generated £28.5m in revenue but produced an overall operating loss. Chief executive John Duffy said consultation on the sale should be complete by October, after which the company should have a better idea of the financial impact of the disposal.
Analysts at Panmure Gordon expect adjusted pre-tax profit of £17.9m in the year to June 2018, giving EPS of 10.2p, up from £17.1m and 9.6p in FY2017.
| FINSBURY FOOD (FIF) | ||||
| ORD PRICE: | 101p | MARKET VALUE: | £131m | |
| TOUCH: | 100-101p | 12-MONTH HIGH: | 138p | LOW: 99p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 79p* | NET DEBT: | 17% | |
| Year to 1 July | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 177 | 6.1 | 12.3 | 0.8 |
| 2014 | 176 | 6.6 | 6.7 | 1.0 |
| 2015 | 256 | 8.5 | 5.8 | 2.5 |
| 2016 | 320 | 11.8 | 6.1 | 2.8 |
| 2017 | 314 | 13.0 | 7.1 | 3.0 |
| % change | -2 | +10 | +16 | +7 |
| Ex-div: | 23 Nov | |||
| Payment: | 22 Dec | |||
| *Includes intangible assets of £80.3m, or 62p a share | ||||
