Stock of the week: Finsbury Food Group
The specialist baker Finsbury Food Group reported strong full-year figures last week, with adjusted operating profits rising by 37.7% to £17.1m. Investment across the business, and the successful integration of its recent acquisitions Fletchers Group and Johnstones Food Services, has helped the company to grow across all its divisions, supported by a strong balance sheet. The company also announced that it was increasing its dividend by 12% year-on-year.
The shares trade on a 2017 price-to-earnings ratio of 14.1, below the average for the sector. The price to sales value of 0.5, with a prospective dividend yield of around 2%, is also relatively good and is well covered by earnings.
The potential from the company’s recent acquisitions, its diverse customer base, good relative value and the helpful underlying economic picture all contribute to our ‘buy’ recommendation for higher risk investors seeking growth.