Glisten, the UK-based confectionery manufacturer whose best known brand is SunMaid chocolate-coated raisins, has unveiled its first acquisition since its floatation on AIM last year.
The company has bought the trading operations and assets of Sunya, a division of Renshaw Scott, the manufacturer of baking aids and sweet spreads, for £750,000 plus a further £220,000 for the company's stocks.
There will in addition be £110,000 of costs associated with the transaction, the company said.
Sunya manufactures chocolate confectionery, such as foiled and netted chocolate balls as well as seasonal products for the retail sector and gift trade. Its clients include many of the UK's major multiple chains.
Production of Sunya's products will be transferred to Glisten's Blackburn production site in December in order to minimise disruption during the pre Christmas peak, the company said.
Sunya had sales of approximately £1.8 million in the year to 30 June, while pro forma operating profits were £220,000.
The purchase is in line with Glisten's strategy of building a food group focused on niche sector, chairman Jeremy Hamer said, adding that he expected the deal to be earnings enhancing in the second half of the financial year.
"Whilst being a significant and immediate 'bolt-on' to the Glisten chocolate confectionery range, Sunya will in the medium term provide a number of additional cross selling opportunities as most of its customers and product capabilities are new to Glisten," he added.
Glisten started life in 1932 as a manufacturer of edible decorations and since its acquisition by its current shareholders in 1977 has moved into the field of confectionery production specialising in chocolate and sugar coated products, such as chocolate coated raisins, peanuts and brazils, mint imperials, popcorn, mini-eggs, sugar-coated almonds and an assortment of ingredients-oriented products which are sold to major food manufacturers. The company in its current form was created in 2001.
It also sells edible decorations to major industrial users such as ice cream manufacturers, yoghurt manufacturers and industrial cake manufacturers.
Around 60 per cent of its products are own labels, with the company's customers including Aldi, Iceland, Tesco, Booker, Pizza Hut, Netto, Muller and Morrisons. Retailers were the leading source of revenue with 40 per cent of the total sales.
But Glisten is also steadily improving its branded business. For example, the company holds the SunMaid chocolate raisin brand distribution rights in Denmark, Norway, Finland and Sweden and is in discussions to extend this arrangement into other EU countries, but it is increasingly able to use its own brand name and logo - for example, sales to some major department stores of speciality packs, boxed assortments and jars are sold under the Glisten name.
The company said that chocolate-coated fruit and nut products were perceived as somewhat more healthy than 'pure chocolate' products by consumers and that they would thus benefit from the ongoing trend towards healthy-indulgent products. The company recently announced sales of £15.6 million for the year to June 2003, a 9.3 per cent increase on the pro forma figures for the previous year. Pre-tax profits of £1.4 million compared to losses of £63,000 the year before, although the company stressed that comparisons were not really relevant as the company only commenced trading in its current form in June 2002.