Finsbury Food wary of inflation after record revenue performance

Finsbury Food reported a 13.9% improvement in group revenue in its preliminary results on Monday, to £357m, making for a record revenue performance.

The AIM-traded firm said gross margins were broadly stable for the year ended 2 July at 32.4%, compared to 32.9% for the 2021 financial year.

It reported group EBITDA of £28.7m, up 6.9% year-on-year, while profit before tax was ahead 12.1% to £17m.

Adjusted diluted earnings per share improved 17% to 10.1p, while net bank debt pre-IFRS 16 widened to £20.6m from £13.1m, representing 0.7x full-year EBITDA.

“To have delivered a record revenue performance that is in line with market expectations despite the numerous and complex challenges faced in the year - initially the effects of the Covid-19 crisis and more recently significant input cost inflation and falling consumer confidence - demonstrates the resilience and agility of the group and the enduring appeal of our product range,” said chief executive officer John Duffy.

“Throughout the period, our retail business continued to perform well, we saw a bounce back in foodservice, and our overseas division experienced further strong growth.

“The level of internal response required to deliver these results cannot be understated, and I am grateful to our teams for their considerable efforts.”

Duffy said the company was able to mitigate “most” of the impact of the macroeconomic challenges through revised commercial arrangements, operational improvements and other supply chain initiatives.

“We will continue in the same vein in the new financial year, as these pressures are expected to worsen.

“While significant macro headwinds are set to persist, we have a successful track record of navigating challenging market conditions and are supported by a strong balance sheet.

“We will continue to meet challenges head on, and I remain confident we will emerge a stronger business well set to deliver on our long-term growth ambitions.”

At 0808 BST, shares in Finsbury Food Group were down 3.61% at 75.67p.

Reporting by Josh White at Sharecast.com.