StockMarketWire.com - Finsbury Food Group says that since the positive annual general meeting trading update in November, the strong trading performance throughout the Christmas period has continued.

Total company sales revenues grew to £107.6m, an increase of 24% on prior year. This represents organic growth of just over £4.9m, an increase of 5.6% versus prior year.

The group says the Fletchers acquisition completed at the end of October contributed £16m of additional sales revenue. Consequently the UK Bakery division grew by 27.7% inclusive of Fletchers, with an especially strong seasonal performance from Cake.

The overseas division, the company's 50% owned joint export business, also finished the first half strongly, resulting in flat sales versus the prior year and reversing the 3.1% decline reported for the first 4 months.

The strong sales growth and continued momentum was helped by new products such as Disney Frozen cakes, popular Christmas seasonal ranges and increased promotional activity. As previously stated, consumer markets remain challenging and the Board anticipates that the Fletchers acquisition will drive the Group's second half growth.

Improvements in operating efficiencies resulting from the ongoing capital investment programme, and overhead reductions completed during the second half of last year complemented the stronger first half organic growth. These combined volume and efficiency benefits helped offset labour and general cost inflation pressures, which have moderated compared to recent years, delivering improved operating margins.

Chief executive John Duffy said: "The Fletchers acquisition, while still in early stages of Group integration, has shown very positive signs of growth and progress. In addition, our capital investment programme continues and has laid the foundation for the Group's positioning in a market experiencing industry-wide pressures. These factors, along with the benefits of being a larger, more diversified speciality bakery group underpin our belief that the Group is in a strong position for the year ahead."




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