Food firm remains cautious despite growth in revenue

by Aled Blake - 01/10/2009

"BAKED-GOODS manufacturer Finsbury Food yesterday warned of another tough year ahead for the company after reporting growth in revenue of 8%."

The Cardiff-based firm said trading conditions were “unlikely to improve in the short term”, adding that the business would be further affected by rising unemployment.

Outgoing chairman David Marshall, who will be replaced by chief executive Martin Lightbody in November, said: “Our businesses and their customers will face continued uncertainty in factors such as interest rates and the strength of sterling.”

As London Stock Exchange- listed Finsbury announced pre-tax profits of £5m, compared to £7.07m in 2008, the company unveiled a shake-up at board level, with chief operating officer John Duffy taking over from Mr Lightbody as CEO with immediate effect. Mr Lightbody is receiving £500,000 as a result.

Finsbury saw its turnover reach £178.9m in 2009, up £13.8m from £165.1m in revenue in 2008.

Mr Lightbody said: “We have spent the last year integrating our business to drive improvements in efficiency, quality and service. Having invested in our understanding of our markets and customers we have adjusted our product ranges and sales strategies to fit in line with changing customer and consumer demands.

“I am delighted that we have continued to grow despite the recessionary environment and continue to enjoy support from our bank and shareholders.”

Finance director Lisa Morgan confirmed the company had made a small number of redundancies from its 2,500-strong workforce in the past year as it looked to integrate acquired businesses and introduce operational efficiencies.

Mrs Morgan explained that Finsbury’s ability to make further acquisitions was hampered by the group’s debt levels and the availability of funding.

She said: “We are very much focused on doing what’s right in the medium and long-term. If possible acquisitions come our way we will look at them.”

The company was subject to a takeover bid from an unnamed rival earlier this year and Mrs Morgan said those discussions had ended months ago.

With little financial slack for further acquisitive growth and with the takeover talks shelved, Finsbury is looking to grow its market share in the areas it is already strong in – as well as new niche sectors of the baked goods market such as gluten-free produce.

Mrs Morgan said Finsbury, which owns Memory Lane Cakes in Cardiff, is keen to encourage more consumers to buy into the premium cake ranges it produces.

She said: “The other opportunity coming up is for our bread and free-from businesses where we should see strong growth in the Nicholas & Harris business, with Goswell’s, which was acquired last year and integrated into it.

“We have also launched two fresh free-from breads with our brand partner Genius, and we are feeling very positive about that as we roll the product out to other customers and develop the range.

“The gluten-free market is growing significantly year on year and getting a fresh bread into that market is something new.

“It is an area of the business that has been far ahead of our expectations compared to when we entered into the area.”

Mrs Morgan said the company remained cautious about the overall economic outlook for the year ahead.

“Much of our success depends on external factors, such as input costs.

“There’s some risk there for us, it’s true to say that the sales of some of our premium products have declined over the last 12 months as a result of the economic environment.

“How quickly those sales recover remains to be seen, and while we are positive about the year to come, there remains a note of caution.”

More Details: http://www.walesonline.co.uk/business-in-wales/business-news/2009/10/01/food-firm-remains-cautious-despite-growth-in-revenue-91466-24823547/