Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineFinsbury’s sweet outlook
Specialist bakery manufacturer Finsbury Food (FIF:AIM) has a platform for ambitious deals in a fragmented industry.
Already a bigger, more diversified business having integrated the Fletchers and Johnstone’s acquisitions, the cake, bread and muffin maker has consistently been a Shares favourite.
We remain bullish at 129p with 34% upside towards Investec’s 173p price target. Full year results (19 Sep) revealed 41% growth in adjusted pre-tax profit to £16m with organic growth of 5% well spread across the grocery and foodservice channels.
Enlarged Finsbury has favourable exposure to growing parts of the UK bakery market and the return to volume growth of key supermarket customers is a positive.
Net debt of £19.7m feeds into a modest leverage ratio of 0.8 times EBITDA, leaving Finsbury equipped to fund organic growth by investing in its high-quality asset base and with the firepower for bigger acquisitions.
For the year to June 2017, Investec forecasts pre-tax profit of £17.2m for earnings of 10.1p (2016: 9.7p) and an improved 3.1p dividend. A prospective PE of 12.8 leaves re-rating scope and Finsbury also offers a 2.4% yield. (JC)
We remain positive on Finsbury Food at 129p.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
