News blog
Finsbury Food Group
- BY: Andrew Hore |
- POSTED: 15/01/2009 |
Finsbury Food Group is growing its underlying sales but operating margins are likely to be more than 1% lower this year.
Revenues were 12% higher in the first half. Acquisitions accounted for growth of 7% and 3% relates to an extra week of trading.
Like-for-like sales growth in the bread business was 16% and in the FreeFrom business the figure was 23%.
Cake sales were flat on a like-for-like basis. There was a reduction in sales of seasonal products.
There is increasing demand for products under the WeightWatchers and Thorntons brands.
The underlying operating margin was 5.8% last year so a 1% plus margin decline will make a big dent in profits.
Shares in Finsbury edged up 0.5p to 15p each, which values the company at £7.72m. Net debt was £42.7m at the end of June 2008.
Debt is the company’s major problem and that is why the shares are trading on 2.3 times forecast earnings - based on FinnCap‘s expectation of a 23% drop in pre-tax profit. If the dividend is maintained the shares will yield 14.7%.
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