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Finsbury Food bakes up important increase in full year sales to Europe

· AIM group said full year sales to Europe were up 15% courtesy of new products

· Debt levels have fallen and dividend for the year rose by 7.1%

· The Share Centre recommends Finsbury Foods as a ‘buy’ for higher risk investors

As Finsbury Food reports its full year results market Graham Spooner, investment research analyst at The Share Centre, explains what it means for investors.

AIM listed company Finsbury Food today reported an important increase in full year sales to Europe up 15% to £38.1m.

In what remains a difficult market for its main UK business, the bakery producer highlighted that it will increase focus on improving sales in Europe. The company has invested in new products as well as new plant systems and will improved its IT systems, all of which is aimed at improving future performance .

Results released this morning also included a 10% jump in pre-tax profit to £13m despite little change in overall revenue and the total dividend for the year rose by 7.1% to 3 pence. The group described the past year as one of consolidating and investing for the future and its CEO John Duffy noted that ‘investments to date had paid off’. Duffy went on to say the ‘initiatives implemented during the year will continue to ensure that the group maintains its position as a low cost and leading speciality baker in the UK over the next 12 months and beyond’.

Finsbury Food has a wide range of products and customers, including supermarkets, cafes, wholesalers and caterers, which subsequently reduces the risk level and gives it exposure to potential growth in a number of areas. Moreover, its overseas division, in which Finsbury has a 50% share, is showing signs of improvement.

Despite the group referencing today that the business environment isn’t going to get any easier, we believe there is potential from recent acquisitions and its diverse customer base. Therefore, we continue to recommend Finsbury Food as a ‘buy’ for higher risk investors seeking growth.

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