Finsbury Food delivers 'robust' full-year performance

Finsbury Food Group said in a trading update on Wednesday that it delivered a “robust” performance in the financial year just ended, in line with market expectations, while also “managing and adapting” to “exceptional” macroeconomic and inflationary headwinds.

The AIM-traded firm said total sales of £356.8m for the 12 months ended 2 July represented a 13.9% increase, of which volume was 8.7% versus the prior year.

It said it delivered a “strong” second half, with revenues in the six month period up 18.7% year-on-year.

The company said the growth in sales was driven by a “stable performance” in the group's core UK bakery division of 12.1%, which included a continuation of the “robust recovery” in foodservice of 38.1%, and a 26.6% increase in its overseas division.

Finsbury said it was still being “challenged” by the pressure from input cost inflation, staff shortages and other supply chain disruptions.

It said it was able to “mostly mitigate” the impact of those pressures through revised commercial arrangements, operational improvements and other supply chain initiatives.

The board said it would continue in the same vein as further inflationary cost pressures were expected in the new financial year.

Finsbury Food also successfully negotiated a new four-plus-one year £120m credit facility of a core £60m and a £60m accordion, effective 27 June.

As it said in its interim results in February, the board was exploring opportunities to accelerate growth through targeted acquisitions.

While the current stock market conditions persisted and lower ratings of food manufacturers became “a feature”, the board said the new credit facilities provided financial flexibility for the group to pursue its growth ambitions.

“To have delivered a record revenue performance this year that is in line with market expectations despite the challenging backdrop is testament to the hard work of our teams and the resilience of our model,” said chief executive officer John Duffy.

“Our retail business performed well, we continued to see a bounce back in foodservice, and our overseas division continued to see strong growth.

“In recent years, we have experienced unprecedented challenges first triggered by the Covid-19 crisis and now by significant input cost inflation and falling consumer confidence.”

Duffy said that, while headwinds were expected to persist, the firm had a “strong” balance sheet and a “successful track record” of navigating challenging market conditions.

“I remain confident in Finsbury's ability to deliver on its long-term growth ambitions.”

Finsbury Food said it would announce its results for the 12 months ended 2 July on 26 September.

At the close on Wednesday, Finsbury Food Group shares were up 3.68% at 70.5p.

Reporting by Josh White at Sharecast.com.