Cake and bread maker Finsbury Food Group said it had raised almost four million pounds to fund the company's UK cake business.
The firm said a placing of around 10.4m new shares at 38p each had raised £3.9m before expenses.
It plans to use the proceeds to develop the product portfolio capability at its cake business using new technology and automation.
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It will also improve production efficiencies, thus reducing the cost of manufacturing.
"Projects will be implemented in a phased fashion over the course of the next two years to avoid any exceptional charges," the statement said.
"The directors of the company believe the planned investment will deliver a final annualised benefit of some £2m."
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