9 November 2011 – trading update

A trading update has been released for the six months ended 31 October 2011, with trading in line with expectations and ahead of last year.  Sales for the period increased by 2.2% to £61.7m despite the fact that the Snacks Division exited approximately £10 million per annum of low margin commodity business at the start of this financial year.  Stripping out the impact of this andadjusting for the acquisition of Derwent Lynton, the underlying turnover growth for the period is around 7.7%, which is impressive given the current trading environment.

There was an increase in the operating margin during the period and seasonal orders to date have been in line with expectations.  Following the acquisition of Derwent Lynton in April 2011, the factory has been closed and the business and assets transferred to the HHF site, with planned non-recurring reorganisation costs of £0.5m.  Thecompany believes that integration is progressing well and the business is trading profitably.  Zetar’s net debt position at 31 October was reduced to £24.4m (31 October 2010: £26.0m).  Interim results are due out in January and ahead of that news we remain comfortable with our BUY rating.