Strategic Report
12 Finsbury Food Group Annual Report & Accounts 2018
Business Model
Corporate Governance
Financial Statements
We make bread, cakes and morning goods for the UK retail and foodservice markets, and are extending our reach into Europe.
The business model below illustrates our chosen system of inputs of capital, and how we transform them through various business activities into outputs.
Creating Value Cost Effectiveness
• Centralised Group buying focused on high-quality and cost effective ingredients.
• Operational excellence initiatives focused on achieving lowest-cost-producer status in areas where we have niche strength e.g. artisan breads or round sharing cake.
• Group logistics leverages our scale to achieve lowest cost route to customers.
Value for Shareholders Using our Operating Principles effectively achieves our Purpose and Strategy, creating long-term shareholder value through share price growth and attractive dividends. Over the year, the share price increased 2.5p to 118.5p and the dividend increased from 3p per share to 3.3p per share, a 10% increase.
Bread and Cakes for Customers and Consumers
We define ourselves as a Speciality Bakery group. Everything we do is with a view to achieving baking brilliance. We are predominantly a ‘retailer brand’ manufacturer, but target our product development at 'wowing' consumers, in line with emerging trends and shopping evolution. We constantly innovate and refresh our hot cross buns, artisan breads, celebration cakes, sharing cakes, Christmas Yule logs, and our Kara range of foodservice bakery products.
Growth with Our Partners
• Our scale and diversity of products across UK bakery means the relationship with grocery retail customers is a partnership.
• Our business with discounters is growing in line with their growth within UK grocery.
• Our channel diversification into foodservice, our Kara foodservice brand, and our broad frozen foodservice range of products, sees us as the leading foodservice partner to the industry, growing at 6% in the year.
We measure success by the closeness of our long-term relationships with our retail partners, by our growing presence in the discounter and convenience channel, and by the growth in our foodservice business.
Our products reach a broader base of consumers through a strategy to diversify across all UK channels and indeed European markets. Our customer base is broad, and having no single dependency lowers risk and creates value.
Employment and Development Opportunities for Individuals and Communities
People Who Care
• A health and safety risk management team with a mantra of "Home Safe Every Day", supported by resources and a common Group-wide strategy and programme.
• Values of teamwork, honesty, ownership, respect and communication: – New workplace Facebook communication tool to facilitate communication between all employees.
• A people strategy for all employees, embracing courses in basic English, an engineering apprenticeship programme, a graduate recruitment programme and leadership development programmes.
• Annual employee survey to obtain our employees' views.
People are important to our business. We have approximately 3,000 employees, ranging from unskilled, through semi-skilled, to management. Opportunities exist within all our bakeries for training and development programmes and talent management initiatives. We recognise potential and develop skills, facilitating personal development and advancement. Our 'People Who Care' Operating Principle, and initiatives that support it, reflects the importance of people to our business.
Tax Paid
A UK manufacturing group generates substantial tax for the country. Our employees pay tax on their earnings and the Company pays national insurance on those earnings. The Company pays Corporation Tax with an effective tax rate of circa 21%, as well as paying packaging and apprenticeship levies. There are a variety of other indirect taxes, e.g. 50% of our energy bills are fixed government-imposed renewable costs.
As a Group, we do not engage in initiatives to shelter profits from tax.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100
