2
Finsbury Food Group Annual Report and Accounts 2020
Strategic Report Highlights
Resilient Group Revenue Summary Resilient Group revenue of £306.3 million. Adjusted*1
EBITDA down 4.4% to £24.4 million (up 2.8% to £26.2 million
including impact of first-time adoption of IFRS16 of £1.8 million). Adjusted*1
and non-recurring items of £10.3 million. Adjusted Basic EPS*2
7.9p.
Net bank debt of £26.5 million, decreased by £9.1 million (2019: £35.6 million) at 1.1 times annualised EBITDA of the Group (2019: 1.4 times).
The impact of the first-time adoption of IFRS 16 will be to increase operating profit by £0.1 million, interest costs by £0.2 million, EBITDA by £1.8 million, debt of £11.8 million (previously operating leases under IAS 17) and assets of £9.4 million.
Strategic Highlights
The business has proven to be resilient, responding quickly to Covid-19 to deliver a robust trading performance.
Covid-19 and resultant lockdown had an immediate and adverse impact on Group revenue and profit.
• Foodservice business adversely impacted; • Retail business had winners and losers depending on subsector; and • Polish business struggled with fall in demand and logistics barriers.
Responded rapidly to create a safe working environment for our employees.
Continued focus on driving productivity and efficiency.
• Integrated IT system embedded in all manufacturing sites (excluding Ultrapharm);
• Implementation of Group-wide review and standardisation of bakery processes leading to improved quality and reduction of waste; and
• Systematic focus on quality with a 10% reduction in complaints year on year.
Opening of new gluten free bakery in Poland to expand capacity for the continental market.
Further innovation in line with consumer trends with the launch of:
• BOSH! branded plant based, vegan friendly whole cakes and celebration cakes;
• Celebration Cake factory now nut free with re-engineered character licensed celebration cakes;
• New Line of Harry Potter licensed cakes; • Growing gluten free cake range rolled out across new retail customers; and
• Artisan sourdough bread range expanded into new retail customers.
Continued development of HomeSafe programme with 15% decrease in number of accidents during the year.
Implementation of Group-wide environmental framework in line with ISO14001.
Product excellence illustrated by the winning of several Quality Food and Drink ‘Q’ Awards.
Adjusted Profit Before Tax
Adjusted Profit before tax excluding IFRS 16 impact
IFRS 16 impact on profit before tax
Adjusted profit before tax including IFRS 16 impact
Significant non-recurring items – (Note 4)
Significant non-recurring items – impairment of goodwill and non-current assets (Note 4)
Difference between defined benefit pension scheme charges and cash cost
Movement in the fair value of foreign exchange contracts
Discounting of deferred consideration Movement in the fair value of interest rate swaps
Adjustments, significant non-recurring and other items
Profit before tax *1 Profit is before significant non-recurring and other items.
*2 Adjusted EPS has been calculated using earnings excluding the impact of amortisation of intangibles and significant non-recurring and other items as shown on the face of the Statement of Comprehensive Income.
2020 £000
2019 £000
13,869 15,919 –
(141)
13,728 15,919 (1,200)
(1,594) (8,737)
(56)
(73) (14)
(386) (10,860) – (444)
(178) (139)
(382) (2,343) 2,868 13,576
Adjusted EBITDA, operating profit and profit before tax exclude significant and non-recurring and other items as shown in the tables above. The adjusted operating profit has been given as, in the opinion of the Board, this will allow shareholders to gain a clearer understanding of the trading performance of the Group.
profit before tax is £13.9 million which is before significant
In order to understand the business performance, adjusted measures for the Group are presented, which exclude the impact of significant non-recurring items and new accounting standards to present adjusted EBITDA, operating profit and profit before tax. The analyses below show the movement from Adjusted to Statutory measures, the figures are for the 52 weeks ended 27 June 2020 and 52 weeks ended 29 June 2019:
Adjusted EBITDA
Adjusted EBITDA excluding IFRS 16 impact IFRS 16 lease costs
Adjusted EBITDA including IFRS 16 impact
Significant non-recurring items – Reorganisation (Note 4)
Significant non-recurring items – Impairment of goodwill and non-current assets (Note 4)
Difference between defined benefit pension scheme charges and cash cost
Movement in the fair value of foreign exchange contracts
Adjustments, significant non-recurring and other items
EBITDA Adjusted Operating Profit
Adjusted operating profit excluding IFRS 16 impact IFRS 16 impact on operating profit
Adjusted operating profit including IFRS 16 impact
Significant non-recurring items – reorganisation (Note 4)
Significant non-recurring items – impairment of goodwill and non-current assets (Note 4)
Difference between defined benefit pension scheme charges and cash cost
Movement in the fair value of foreign exchange contracts
Adjustments, significant non-recurring and other items
Operating profit
2020 £000
1,840
2019 £000
24,408 25,527 -
26,248 25,527
(1,594) (8,737)
200 (73) (10,204)
(1,200) -
(162) (178) (1,540) 16,044 23,987
2020 £000
106
2019 £000
14,833 16,833 -
14,939 16,833 (1,200)
(1,594) (8,737) 200 (73) (10,204) - (162) (178) (1,540) 4,735 15,293
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