36 Financial Review
Finsbury Food Group Annual Report and Accounts 2020
Group revenue for the 52-week period to 27 June 2020 is £306.3 million, 2.8% lower than last year.
Following a strong first- half performance, which saw Group revenues grow 4.7% to £159.4 million, performance in the second half was impacted by the outbreak of the Covid-19 pandemic, with sales down 9.8% to £146.9 million.
20% of Group revenue is within foodservice/ out-of-home eating which was largely shut down in response to the pandemic. The reduction in sales to the foodservice/ out-of-home eating, starting 23 March, is the primary driver behind the reduction in second-half Group revenue. Monthly sales since 23 March have improved from being 24% down in April to 15% down in June against the prior year. This reflects the beginning of a recovery in foodservice/out-of-home eating but also reflect growing volumes in our Retail business as consumers adjust to a changed environment. Adjusted operating profit at £14.9 million is down 11.3% on last year. Adjusted operating profit margins are 4.9% (2019: 5.3%), a consequence of Covid-19.
Impairment and Other Significant and Non-recurring Items At the year end we identified a non-cash impairment of goodwill in Ultrapharm of £7.5 million a consequence of forecasted future earnings that do not support the carrying value. In addition, strategic reorganisation costs on the back of the pandemic of £1.3 million, a value write down in unused bakery assets in Cardiff of
52 week period ended 27 June 2020
performance £000
Revenue
Cost of sales Gross profit
Other costs excluding depreciation & amortisation EBITDA
Depreciation & amortisation Operating profit Finance income
Finance costs
Profit before tax Taxation
Profit for the year
306,348 (210,881) 95,467 (69,219) 26,248
(11,309) 14,939 61
(1,272) 13,728 (3,398) 10,330
*Refer to Note 4 for further details on significant non-recurring items. 52 week period ended 29 June 2019
performance £000
Revenue
Cost of sales Gross profit
Other costs excluding depreciation & amortisation EBITDA
Depreciation & amortisation Operating profit Finance income Finance costs
Profit before tax Taxation
Profit for the year
315,281 (219,849) 95,432
(69,905) 25,527 (8,694) 16,833 77
(991)
15,919 (3,605) 12,314
Operating
non-recurring items £000
- - -
(1,200) (1,200) -
(1,200) - -
(1,200) 128
(1,072) Significant
Defined benefit pension scheme £000
- - -
(162) (162) -
(162) -
(282) (444) 75
(369)
swaps/foreign exchange contracts £000
Fair value of interest rate
consideration £000
- - -
(178) (178) -
(178) -
(382) (560) 95
(465)
- - - - - - - - -
(139) 24
(115)
Discounting of deferred
Comprehensive Income £000
Consolidated Statement of
As per Operating
non-recurring impairment Note 4 £000
- - -
(8,737) (8,737)
-
(8,737) -
-
(8,737) 235
(8,502) Significant
non-recurring other items Note 4 £000
- - -
(1,594) (1,594)
-
(1,594) -
-
(1,594) 303
(1,291) Significant
Defined benefit pension scheme £000
- - -
200 200
-
200 -
(256) (56) 11
(45)
swaps/foreign exchange contracts £000
- - -
(73) (73)
-
(73) -
(386) (459) 87
(372)
Fair value of interest rate
consideration £000
- - - - -
- - -
(14) (14) 1
(13)
Discounting of deferred
Comprehensive Income £000
Consolidated Statement of
As per
£1.2 million and pre-pandemic commissioning costs of our new bakery in Poland of £0.3 million, have all been classified as significant and non-recurring. Items identified as significant and non-recurring have been excluded from operating profit in the table below to better reflect the ongoing trading position. Adjusted operating profit is deemed to provide a clearer presentation of the trading performance and sustainable cash generation of the Group.
Dividend The Company announced the cancellation of the interim dividend on 29 March 2020. The Company has decided not to pay a dividend for the 52 weeks to 27 June 2020, given the uncertainty of Covid-19, as well as the additional risks that will be faced in the case of a no-deal Brexit.
The tables below show what the Directors consider to be the trading performance of the Group. The adjusted measures eliminate the impact of significant and non-recurring items and other accounting items that are not deemed to reflect the continuing performance of the Group.
306,348 (210,881) 95,467 (79,423) 16,044
(11,309) 4,735 61
(1,928) 2,868 (2,761) 107
315,281 (219,849) 95,432
(71,445) 23,987 (8,694) 15,293 77
(1,794) 13,576 (3,283) 10,293
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