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Healthier snacking informs Zetar sales growth

By Jane Byrne , 12-May-2010

UK snack and confectionery group, Zetar, claims its new healthy snacking range informed its accelerated sales growth and aided “strong” financial recovery in the second half of 2009.

In a trading update ahead of the group’s preliminary results for the year ended 30 April, Zetar said sales had increased 10 per cent to reach £131m.

“The introduction of a number of economy dried fruit and nuts lines proved incremental to our existing premium ranges and, together with the launch of our first licensed branded products such as Reggae Reggae nuts and Sun Pat peanut clusters, contributed to an overall 11 per cent increase in divisional sales,” said the company.

Confectionery sales also saw a hike of nine per cent to £82m. “We achieved notable successes in growing sales from our three factories of branded, private label and third party all-year-round chocolate products,” claims the trading statement

Raw materials costs, added the group, were less volatile during most of the year and the also helped its margins recovery.

Ian Blackburn, Zetar CEO, told this publication that its ‘no added sugar’ Fruit Factory brand, which was extended last year, has been currying favour with parents seeking ‘better for you’ school lunch options as they look like confectionery products, while he said its flavoured nut ranges are appealing to adults intent on a healthier lifestyle.

And he is optimistic that earnings for 2010 will be significantly up on last year.

According to the CEO, the business aims to deliver strong organic growth in 2010 through maximising cost synergies across its seven UK production sites. It has centralised raw material buying and will shift product production from one facility to another if it ensures cost efficiencies are met.

The group also plans to grow acquisitively if suitable opportunities arise, and Blackburn sees investment in a facility that would enable Zetar control of distribution to continental European based retailers as essential for increasing exports. However, he would not be drawn on the timing of such a venture.

Last year, Zetar sold its loss-making subsidiary, The Baked Snacks Company to Tilbury Property.

In deal tipped at £2.68 million, Zetar said at the time that the BSC disposal would remove the company's "only loss making subsidiary", giving a boost to earnings and freeing-up management to "refocus solely on continuing to grow the profitable confectionery and natural & premium snacks divisions."

Zetar, which is also involved in private label and sub-contract manufacture, said its confectionery division accounts for approximately two thirds of total group revenue, with the natural and premium snacks unit responsible for the remaining third.

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