Discount shares for new Finsbury Food boss

Cakes and speciality breads maker Finsbury Food's new chief executive has been issued 1.04m shares at 19.25p a share as part of his remuneration package. He received a further 201,000 shares for nothing, taking his total stake to 1.25m shares. At the current share price of 28.5p, Duffy's additional shares are worth £353,000, against their total cost of £200,000.

John Duffy was appointed chief executive at the end of September 2009. He had been chief operating officer for more than one year. Duffy previously worked for Golden Wonder and Mars.

The cake and speciality breads business has been finding trading tough with weak demand and higher costs.

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Finsbury Food's revenues increased 8% to £179m in the year to June 2009. Revenues no longer include customer rebates and promotional discounts. Like-for-like sales rose by 2%. Reported profits slumped from £5.07m to £1.78m. Underlying profits still declined from £7.73m to £5.05m. Gross margins improved from 26.8% to 27.2%.

The dividend was passed because Finsbury needs to cut its borrowings. Net debt was £41m at the end of June 2009 - £1.9m lower than six months before. Finsbury paid an initial £500,000 for bread maker Goswell Enterprises during June 2009 - £1.7m more is payable over four years. There is £3.3m of deferred consideration payable over the next 13 months according to Charles Pick of FinnCap.

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