Business Week: Loads of dough

In a pre-close statement in January, the prepared foods company said it expected a 15% growth on last year, in line with expectations.

Pullen admitted second half growth was slower than the first ‘due to the timing of new business gains made during 2000, which progressively increased the comparator year sales’.

But it was the hunger of UK consumers for freshly prepared food in the second half that strengthened the company’s sales, as growth outstripped that of the market at 10%.

Pullen said: ‘We have seen, and expect to continue to see, increases in both input and output prices.’

During the year, the company opened five new outlets and, in October, purchased Lincolnshire -based chilled foods company Tinsley Foods from receiver KPMG for less than £10m.

Net cash investment from the new outlets and the acquisition is expected to be over £30m and a consequent increase £2m.

According to Pullen, this acquisition meant purchasing good quality assets, enabling the company to meet some of its expansion plans more cheaply than if they had been building from scratch.

The CIMA-qualified accountant, expects capital expenditure for the year will be about £75m for the year with some depreciation.

His confidence remained strong throughout the second half of the year.

As others spoke of impending doom in their businesses, in October, Pullen said the company’s bottom line had been unaffected by September 11 and that the economic slowdown had little effect on the market.

He said: ‘From the stats we have for the first half of this year we saw growth in the markets in which we operate at between 10 and 12% and that’s a long run growth rate we’ve seen for the last five, six years.

‘We see no reason why the fundamentals that drive that market will change in the future.’

Analysts in the sector were bullish on the stock, saying the fresh food market is a good sector to invest in. According to WestLB Panmure, Geest is a ‘genuine growth company in a defensive sector.’

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