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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.
A share price pullback at diversified bakery group Finsbury Food (FIF:AIM) represents a buying opportunity ahead of full year results (18 Sep). Reassuring commentary despite trading amid tough industry conditions and potential for updates on new license and customer wins or even further acquisitions, are among the reasons to swoop at 109p.
Celebration cakes, artisan breads and muffins maker Finsbury Food faces a tough consumer market and rising input costs, but remains confident in its ability to maintain a market leading position and deliver profitable growth.
Shares admires Finsbury Food’s diversification across the retail and ‘out of home eating’ foodservice channels, as well as CEO John Duffy’s unwavering focus on product innovation, productivity gains and improving shareholder value. One example is the tough decision taken to close (23 Aug) Grain D’Or, Finsbury’s historically loss-making, London-based maker of premium baked goods for the UK pastry sector, in a move that removes a distraction and will improve group earnings quality.
Ahead of the results, Panmure Gordon’s Peter Smedley forecasts improved pre-tax profit of £17.1m (2016: £16.5m) for earnings of 9.9p (2016: 9.7p), rising to £17.7m and 10.2p respectively in 2018. On the latter estimates, Finsbury trades on 10.7 times prospective earnings, a rating which appears overly gloomy, while Finsbury offers a near-3% yield based on next year’s 3.2p dividend forecast. We also note significant 38% upside towards Smedley’s 150p target price.
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.
The value of your investments can go down as well as up and you may get back less than you originally invested. We don't offer advice, so it's important you understand the risks, if you're unsure please consult a suitably qualified financial adviser. Tax treatment depends on your individual circumstances and rules may change. Past performance is not a guide to future performance and some investments need to be held for the long term.