Zetar, the UK-based confectionery and snack foods group, has reported a 17.5% drop in adjusted profit before tax to £5.5 million for the year ended 30 April 2012. Revenue dropped 5.0% to £128 million due to Zetar’s strategic exit from low margin commodity snack products and reduction in Easter confectionery sales. Net borrowings were reduced from £14.9 million to £10.8 million as the company remains focused on driving down levels of debt.
Ian Blackburn, chief executive of Zetar, comments: “Last year’s financial performance was disappointing primarily due to the late reduction in Easter 2012 sales, as our customers became increasingly cautious as the economic crisis in Europe unfolded. However, we continued to make good progress towards our main strategic objectives to increase the proportion of everyday and branded sales. Our portfolio of brands has been extended by the addition of the iconic brands Guinness and Tango, and we anticipate signing further well-known brands in FY2013.”
He continues: “We are optimistic about the new financial year following recent significant new everyday product wins and although consumer markets remain challenging, we are pleased that the year has begun in line with our expectations with underlying sales growth of 7%, to which may be added one-off sales in respect of Olympic gifting products of approximately £1.5 million in the first eleven weeks of the year. Last year’s cost initiatives are reflected in improved margins in the period. Accordingly the board is confident that the group’s results for the current financial year will be back on plan.”
Zetar has an ambitious business plan for the next three years in terms of revenue and margin growth targets. This will involves bolstering the company’s brand model with additional licensed brands for both divisions and capitalising on opportunities to drive private label sales as UK retailers seek to complement their value-for-money ranges with more premium added-value products. Zetar has also identified opportunities to expand its export sales, particularly into mainland Europe via the newly-formed subsidiary Zetar France.
The board’s confidence in the group’s future prospects and financial strength is reflected in its decision to increase the dividend by 33%.