3 December 2016

Inter Link Foods


08/07/03 Leslie Copeland

Acquisitive cake and pastry products play Inter Link has baked up some exceptional full-year numbers to April, now supplies all UK grocery multiples and is raising the total dividend almost 20% to 5p. In a year of record sales, profits, and earnings, pre-tax profits were raised 10% to £3m on sales which warmed up by 12% to £51.4m - profits before tax and goodwill clipped ahead 11% to £3.7m. In February, chief executive Alwin Thompson wrapped up Blackburn-based Inter Link's biggest deal to date. It bought malt loaf maker Soreen from Warburtons, funded by a well-supported but discounted share placing and open offer, raising £7m at 285p. Despite City grumbling at the time about pricing, 'the fundraising brought in around 19 new shareholders, and we bought Soreen', chirps Thompson. Inter Link is chasing a UK cake market that was worth £1.76bn in 2002. More specifically, the company has about £50m of the £1.1bn 'ambient wrapped cake' arena; 'we've not really even started yet,' tantalises Thompson. Apparently 69% of the UK population now buy cakes on a regular basis - bad news for the nations' arteries, but good news for shareholders if the trend continues. City broker Numis Securities is still forecasting £5.5m pre-goodwill and tax for the current year, which gives EPS of 41.3p and a 6p dividend. Still exceedingly good value on 8.9 times estimated earnings. Buy.

Sector: Food Producers

Companies: Inter Link Foods

Market cap: £26m

PE Forecast: 8.9

Share price: 369p

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