Trading Statement - Regulatory Release
Zetar, the AIM listed confectionery and snack foods group, is pleased to provide the following trading update in advance of the Group's preliminary results for the year ended 30 April 2010, due to be announced before the end of July 2010.
Strong recovery in trading and financial performance
The trading initiatives implemented during the year have resulted in a strong recovery in the Group's trading and financial performance. The Zetar Board expects to report Group sales, adjusted profit before tax* and adjusted earnings per share* for the year ended 30 April 2010 significantly ahead of last year and in line with market expectations.
Sales increases across both divisions
The Group's sales by division for the year ended 30 April 2010 were as follows:
| Year ended 30 April 2010 | |||
| 2010 (£m) | 2009 (£m) | ||
| Division | |||
| Confectionery | 82 | 75 | 9% |
| Natural & Premium Snacks | 49 | 44 | 11% |
| Total Group | 131 | 119 | 10% |
The difficult economic climate prevailing during the year created opportunities for growth in the value sectors of the food market, reinforced by supermarkets' focus on promotional activity. The Group's strengths in innovation and flexible manufacturing facilities enabled it to adapt its product range to take advantage of these trends.
Confectionery Division
Retailers' focus on efficient supply chain management resulted in a requirement for more "Just in Time" deliveries of product at both Christmas and Easter than in previous years. Despite this total seasonal sales were ultimately in line with our expectations.
Kinnerton brand products performed well and our share of the Advent calendar market increased to 38% (Source: Neilson Christmas 2009). Furthermore, we achieved notable successes in growing sales from our three factories of branded, private label and third party all-year-round chocolate products.
Margins were maintained at similar levels to the previous year, despite a general increase in promotional activity and the weakness of sterling against the Euro, which affected the profitability of our Irish business.
Natural & Premium Snacks Division
The introduction of a number of economy dried fruit and nuts lines proved incremental to our existing premium ranges and, together with the launch of our first licensed branded products such as Reggae Reggae nuts and Sun Pat peanut clusters, contributed to an overall 11% increase in divisional sales. Our range of healthier fruit snacks, sold under the Fruit Factory brand, was extended by the addition of fruit "stars" and fruit "hearts" to the already successful fruit bars and fruit "strings".
Raw materials costs were less volatile during most of the year and the division's margins recovered to longer term target levels.
Debt reduction
A combination of strong trading results and our continued focus on cash management has resulted in lower than expected Group borrowings at 30 April 2010 in the region of £11.5 million, almost £4 million lower than last year.
* Adjusted profit before tax and adjusted earnings per share excludes amortisation of intangible assets, share based payments and all non recurring items
Ian Blackburn, Chief Executive commented:
"We are delighted to announce this strong recovery in the Group's trading and financial performance. Innovation remains a key growth driver for the business and during the period we have introduced a number of new product ranges in both the Confectionery and Natural & Premium Snacks divisions which is evidence of the Group's ability to adapt to dynamic market conditions.
"The significant reduction in debt demonstrates the Group's ability to generate strong cashflow from its businesses whilst continuing to have a high level of investment in its facilities and products."
- Ends -
For further information, contact:
Zetar Plc
Ian Blackburn, Chief Executive Tel: 020 7284 9509
Mark Stott, Finance Director Tel: 020 7284 9543
Financial Dynamics Tel: 020 7831 3113
Jonathon Brill/Caroline Stewart/Georgina Bonham
Altium Capital Limited Tel: 020 7484 4040
Tim Richardson/Sam Fuller
To read the full release, please visit the London Stock Exchange
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