FDBusiness.com

Zetar, the UK confectionery and natural snack foods group, has built on the recovery in its last financial year by reporting good organic growth in the first six months ended October 31st 2010. Adjusted profit before tax rose 10% to £2.4m on turnover up 6% to £60.3m.

Progress was underpinned by the confectionery division, which is now realising the benefits of its past capital investment and strategic focus on everyday impulse chocolate and also enhancing its market leading position in the novelty licensed character sector. Confectionery sales advanced by 11% to £36.6m and adjusted operating profit increased by £0.9m to £2.3m.

In a market that has experienced unprecedented raw material cost increases in the period, the natural snacks division has implemented a series of customer price increases across its range of products. In the short term this cost inflation has reduced the division’s margins and resulted in an operating profit of £0.6m, down from £1.4m in the corresponding period in 2009, on sales down from £24.0m to £23.7m. A stronger second half performance is expected.

“We are pleased to have continued to grow our business organically and deliver profit before tax ahead of last year by 10%. This is particularly good in view of rising raw material costs impacting our snacks business, and demonstrates the value of the business’s continued focus on innovation and product development,” points out Ian Blackburn, chief executive of Zetar. “Based upon the current indications of trading at Easter, the board expects the group to deliver earnings for the full year in line with market expectations.”