Finsbury: analysing the results

Finsbury Food Group unveiled revenue and profit growth yesterday – but what were the drivers for the increases? Here British Baker analyses the performance of the bakery group in greater detail.

Disney: licensed cakes are a big driver for Finsbury Food Group

Finsbury Food Group has been very forthcoming when it comes to its ambitions.

It signalled them clearly enough in October last year when it acquired The Fletchers Group of Bakeries for £56m. And it laid out those plans again in its recent preliminary results. It said: “Our strategic objective is to create sustainable value for our shareholders, customers and other stakeholders by building a UK-wide speciality bakery group.”

It continued: “Our growth strategy will continue to be delivered by a combination of organic growth and targeted acquisitions. Consolidating our market share in existing areas, such as celebration cakes and organic bread, as well as diversifying our existing product capability into new channels such as foodservice cake will deliver the organic growth.

“Further acquisitions will introduce new product, customer or channels diversification or accelerate market consolidation in our core product areas.”

But what has driven the growth?

Fletchers acquisition

As chief executive John Duffy put it, last year was transformational for Finsbury Food Group. This was mainly down to the canny purchase of this Sheffield-based group. Its foodservice work via Kara has opened up a valuable revenue stream for the group. And the Nicholas & Harris part of the business is now managed by Fletchers.

Differentiation

The Fletchers purchase may have brought in some similar products but Nicholas & Harris remains a leader in artisanal-style loaves via its Vogel’s, Cranks and Village Bakery Rye bread.

Let it go…

Anyone with children will know about the amazing lure of Frozen. The group has added this film to its roster of licensed cakes thanks to its tie-up with Disney and the results have been phenomenal, driving an overall value increase of 31% in the last 52 weeks (Symphony IRI 52 w/e 20 June 2015).

Use the force: Finsbury has Star Wars cakes in the later half of 2015

Bananas… and the Force

But it is not just Disney that works with the group. It also has tie-ins with a host of other family friendly favourites, including Peppa Pig, the Turtles and the yellow Minions, now a brand of their own. What’s more, thanks to its deal with Disney, later this year it will be able to capitalise on the new Star Wars movie.

Bites: Thorntons is a big hitter in ambient cake and cake bites

Thorntons

Elsewhere, the much-loved brand might be facing tougher times – but for Finsbury the licence is working, making it the fourth-largest brand in the ambient cake market. And, it also continues to grow in unit sales. It also has a 40%-plus share of the cake bites market.

WeightWatchers

Low fat is not the trend it used to be. Despite this, WeightWatchers remains a big brand. Finsbury has been focusing on packaging to influence portion control.

Management

Finsbury Food Group has a highly experienced duo in the hands of chief executive John Duffy and group finance director Stephen Boyd, but the appointment of baking industry veteran Peter Baker in May 2014 was a masterstroke. It is unsurprising that acquisitions followed his appointment. His next task, as he outlined in the preliminary results, is a review of the structure of the board “to ensure that it has the appropriate composition at board level and further upgrades to our structures of corporate governance”. 

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