Finsbury Foods bakery spending spree
two Scottish bakers following an impressive financial performance
which allowed the company to amass a £10 million war chest to spend
Recent price increases, better management and a lucrative five-year deal with Nestlé has swelled profits, enabling three-year old Finsbury Foods to cast its eye around for innovative niche suppliers to add to its current portfolio of Cardiff's Memory Lane Cakes and Nicolas and Harris of Salisbury.
The company has acquired California Cake Company and Campbell's Cakes from East Kilbride's Enterprise Food Group for £7.4m - market leaders in low fat cake slices and caramel shortcake respectively - as it strives to extend its lucrative position between small craft bakers and larger industrial suppliers.
Finsbury will also pay £2.5m for United Central Bakeries, which supplies a broad range of baked products to major retailers and independent grocers.
It is hoped the acquisitions will allow Finsbury to further its profit capacity and extend its reach in the speciality bakery sector, without requiring major operational restructuring and consolidation.
Dave Brooks, Finsbury's chief executive, said: "The [new] businesses will bring new skills and expertise into the Group and fit our acquisition criteria of having strong management teams already in place and being the market leaders in their respective fields."
Brooks maintains that the only change to the companies will be who holds the purse strings, insisting the management and structure of the new acquisitions will not change.
"We don't want to integrate these into a large food group mentality that takes ages to make a decision - we want to remain nimble and flexible."
Finsbury's sales have risen by five per cent on last year to £29m as the UK's premium bakery sector continues to blossom.
Currently one third of wrapped bread is now sold as premium product, and demand for luxury bakery treats continues to soar with the premium cake market value rising 3.8 per cent last year.
Company founder Lord Saatchi set up Finsbury Foods in 2002 after reinvesting his media and dot.com cash pile to tap into demand for high quality speciality foods.
He purchased Memory Lane Cakes for £9.5m, shortly followed by craft baker Nicholas and Harris for £3.6m.
Finsbury's Memory Lane is the exclusive producer of Nestlé branded cakes, such as Smarties cupcakes, and Nicholas and Harris has a three-year licence to make Village Bakery organic loaves.
The company also provides private label goods to leading retailers Tesco and Asda.