Dividend rises as bread firm profits hit £17m
FINSBURY Food makes goods with almost universal appeal – cakes, bread, buns and morning pastries.
The range is extensive, from Mary Berry’s lemon drizzle to Batman celebration cakes, with organic loaves, hot cross buns and vegan brioches thrown in for good measure.
Customers include all the major supermarkets, as well as wholesale caterers and restaurant chains and the company is known for the quality of its produce.
Despite all these advantages, the business has just been through an extremely tough year, hit by soaring costs in particular.
The company uses 50 tons of butter a week, for example, and the price surged from £2,000 to £6,000 a ton in a matter of weeks late last year.
But Finsbury has fought back, as demonstrated in the group’s annual results, released last week.
The company was forced to shut down a loss-making London bakery half way through the year but even so, underlying sales rose 2.4 per cent to £290 million for the year to June 30. Profits rose 4 per cent to £17.2 million, excluding closure costs, and chief executive John Duffy increased the dividend by 10 per cent to 3.3p, a firm indication of confidence about the future.
Finsbury is moving firmly with the times as well.
Earlier this month, the group bought Ultrapharm, which specialises in gluten-free produce, one of the fastest-growing areas of the bakery market. Artisanal breads are another popular area and, at the more traditional end of the spectrum, Finsbury’s partnership with Mary Berry, initiated last year, is making good progress – with her loaf cakes proving particularly popular.
Brokers expect profits of £18.7 million next year and a dividend of 3.5p, with further steady growth pencilled in for 2020.