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Finsbury Foods FIF – Dividends Tripled Over 2 Years
Finsbury Food Group had a longish history of never quite fulfilling its promise, until at last the promise started showing signs of becoming reality in 2013-14. In addition to its speciality and organic breads, it is the UK’s number 1 supplier of premium cakes and has a 20% share of the UK pre packed cake market. It produces over 15 million hot cross buns annually, every one of them crossed and glazed by hand.
The share price went nowhere until 2012 when it nearly doubled from 23p to 45p. By late 2013 it had risen to 78p before falling back to 45p in early 2014. Since then it has been on a bit of a roll (not hand glazed) and peaked last week at 107p. before falling back to its present 95p.
Last weeks preliminary results showed revenue up by 45.8% to 256m. and profit before tax up by 76% to 11.4m. The final dividend at 1.67p per share made a total annual dividend of 2.5p – a spectacular rise of 250% from the previous years 1p, itself a 33% rise on 2013’s 0.75p.
A company which can more than triple its dividend over 2 years obviously has something going for it. Part of the secret may lie in the acquisition of Fletchers which helped to turn it from a specialist baker into a more diverse bakery group. This year it has won the Bakery Manufacturer of the Year Award which is an improvement on a few years back when it set on a lot of Christmas temps to put chocolate on cakes but forgot to train them as to how much chocolate to use per cake. The result was a financial disaster and a ruinous set of half year results.
Those days are long gone and the new management which followed led the company through difficult times turned it round and helped to make it the success which it is today.
The fall in the share price since last weeks results could create an opportunity to get in below the recent peak.
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