REG - Finsbury Food Group - Acquisition of Lees Foods Limited

Finsbury FoodAnnouncement

30/01/2023 07:00

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RNS Number : 1783O  Finsbury Food Group PLC  30 January 2023

 Date:          30 January 2023
 On behalf of:  Finsbury Food Group Plc ("Finsbury", the "Group" or the "Company")

 

Finsbury Food Group Plc

Acquisition of Lees Foods Limited

 

Finsbury Food Group Plc (AIM: FIF), a leading UK speciality bakery
manufacturer of cake, bread and morning goods for both the retail and
foodservice channels, announces that it has acquired 100% of the share capital
of Lees Foods Limited ("Lees"), a leading manufacturer of meringues, teacakes
and snowballs.

 

Established in 1931, Lees employs more than 200 staff at its site in
Coatbridge, Scotland. Lees has a UK market-leading position in the manufacture
of meringues and has significant capability in the sweet treats category,
adjacent to Finsbury's existing markets. The acquisition is in line with
Finsbury's strategy to diversify its product capability into areas with high
growth potential.

 

Lees has a broad customer base and holds strong supply relationships with the
leading UK supermarkets in addition to foodservice and export customers. The
Finsbury Board believes that it will be able to leverage the scale and breadth
of the Finsbury commercial team and licensed brand portfolio to drive
incremental growth for Lees. In addition, there will be scale cost synergies
over time.

 

Lees' adjusted underlying EBITDA is £0.9 million from adjusted underlying net
sales of £21.6 million 1  (#_ftn1) . The acquisition will be earnings
accretive immediately in FY23.

 

The consideration for the acquisition payable by Finsbury is a cash amount of
£5.7 million, on the basis that Lees is acquired cash and debt-free and with
an agreed level of working capital. The consideration is being funded entirely
from the Group's existing debt facilities.

 

 

John Duffy, Chief Executive of Finsbury Food Group Plc, commented:

 

"We are delighted to announce the strategic acquisition of Lees Foods Limited,
as we consolidate our position in the sweet treats sector and grow our
manufacturing presence in Scotland.

 

Lees currently has a well-established position in the UK meringue category and
strong relationships across a high quality and diverse customer base. This
provides Finsbury with the opportunity to build upon both businesses' existing
retail relationships and unlock further commercial opportunities, including
out of home. We look forward to welcoming Lees to the wider Group."

 

 1  Based on Lees' unaudited management accounts for the 12 months ended 31
December 2022.

 

Contact:

 

 Finsbury Food Group                                                                    www.finsburyfoods.co.uk (http://www.finsburyfoods.co.uk)  029 20 357 500

 John Duffy (Chief Executive)

 Steve Boyd (Finance Director)

 Panmure Gordon (UK) Limited                                                                                                                      020 7886 2500

 Oliver Cardigan / Atholl Tweedie (Corporate Finance)

 Rupert Dearden (Corporate Broking)

 Alma                                                                                   finsbury@almapr.co.uk (mailto:finsbury@almapr.co.uk)      020 3405 0205
 PR

 Sam Modlin

 David Ison

 Matthew Young

 

Notes to Editors:

·      Finsbury Food Group Plc (AIM: FIF) is a leading UK and European
manufacturer of cake and bread bakery goods, supplying a broad range of
blue-chip customers within both the grocery retail and 'out of home eating'
foodservice sectors including major multiples and leading foodservice
providers.

·      The Company is one of the largest speciality bakery groups in the
UK and, together with its overseas division, has sales in the financial year
ending 2 July 2022 of £357 million.

·      The Company's bakery product range is comprehensive and includes:

·      Large premium and celebration cakes;

·      Small snacking cake formats such as cake slices and bites;

·      Artisan, healthy lifestyle and organic breads through to rolls,
muffins (sweet and savoury) and morning pastries, all of which are available
both fresh and frozen dependent on customer channel requirements; and

·      Gluten Free bread, morning goods and cake ranges.

·      The Company is one of the largest ambient cake manufacturers in
the UK, a market valued at £1.06 billion (source: IRI 52 w/e 31 Dec 2022).
The retail bread and morning goods market has a value of £5.7 billion
(source: Kantar Worldpanel 52 w/e 25 Dec 2022). The retail Free From cake
market is valued at £60 million (source: Kantar Worldpanel 52 w/e 25 Dec
2022). The retail Free From bread and morning goods market is valued at £173
million (source: Kantar Worldpanel 52 w/e 25 Dec 2022).

·      The Company comprises a core UK bakery division and an overseas
division:

·      The UK bakery division has manufacturing sites in Cardiff, East
Kilbride, Hamilton, Salisbury, Sheffield, Manchester, and Pontypool.

·      Following completion, the Company will have an additional
manufacturing site in Coatbridge.

·      The overseas division comprises the Company's 85% owned company,
Lightbody-Stretz Limited, which supplies and distributes the Group's
UK-manufactured products and third-party products, primarily to Europe, and
the Company's manufacturing facilities in Rybarzowice and Żywiec in Poland.

 

 

(#_ftnref1)

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