FINSBURY Food Group yesterday reported a huge rise in profits after it sold its Free From business and raised £3.8m through an equity placing.
The bread and cake company’s profits before tax soared 19 per cent to £5.5m, up from £4.6m, in the year to 29 June. Meanwhile debt fell 78 per cent from £33.9m last year to £7.4m this year, largely because of the £21m sale of its Free From brand to Genius.
Group revenue fell 1.3 per cent to £176.6m but bread sales increased 17 per cent, driven by brands such as Vogel’s, Cranks and Village Bakery.
Finsbury cheered investors with the news that it is reinstating a dividend at a proposed level of 0.75p per share.
Non-executive chairman Martin Lightbody hailed the results of the equity placing and sale as “transformative.”
“In November 2012, a successful equity placing during the first half of the year raised £3.8m to fund capital investment projects in our core cake business. The placement attracted a welcome blend of new and existing institutional investors, indicating a long awaited shift in market perception towards Finsbury Foods,” he said.
Chief executive John Duffy said: “Regrettably, the economic environment remains unhelpful with promotional activity at unsustainable levels in most categories of food. Commodity prices have settled down marginally, we haven’t witnessed the huge fluctuations of recent years. Overall, however, trends remain upwards with marked volatility in key ingredients such as wheat, eggs and sugar.”
Shares closed down 2.63 per cent.