UPDATE: Zetar Sees Festive Sales Boost From Toy Story Range

21st Jul 2010 13:34

(Adds executive comment, share price) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. confectionery and snack foods company Zetar PLC (ZTR.LN) said Wednesday it expects the launch of its Toy Story-themed products to drive sales in the run up to the key Christmas trading period, although overall full-year sales growth is expected to slow on the gains seen so far in the new fiscal. The firm, which makes Kinnerton chocolate and produces branded items like advent calendars, is releasing Toy Story-branded chocolate bars in the coming weeks, to coincide with the recent cinema release of Toy Story 3. "We've already done a lot of our selling for Christmas and have a full range coming out. The initial indications on Toy Story 3 point to us having a good Christmas," Chief Executive Ian Blackburn told Dow Jones Newswires. He said because most of Zetar's production is done in the U.K., the company can make more Toy Story 3-themed Christmas goods right up to December 20 if demand outstrips supply. As well as Christmas, Easter is a key sales period for Zetar, when it sells branded, licensed easter eggs for shows like the X Factor, The Simpsons and Top Gear. The company made a fiscal 2010, ended April 30, pretax profit from continuing operations of just under GBP6 million from GBP2 million a year earlier. Sales of its chocolates climbed 11% to GBP131.9 million, boosted by product innovation and the launch of cheaper economy ranges. Most of Zetar's chocolate is made at factories in the U.K., which gives it the flexibility to increase production of certain chocolate if demand is high, or switch production elsewhere if demand falls. This flexibility came in handy throughout the recession, when Zetar started making more value chocolate ranges, enabling it to gain additional volume sales. The group has made a solid start to fiscal 2011 trading, with sales up 11% on the year to GBP16.2 million, matching the growth it saw over fiscal 2010 as a whole. However Zetar expects this growth to slow to about 6% over the course of fiscal 2011 as a whole, although it said this would still be an outperformance of the broader market. "Some of our growth will be annualized, incremental business but we're launching a new product virtually every week and we're talking about a grocery industry at the moment that is growing at only about 1% at most," Blackburn said. At 1216 GMT, Zetar's shares were trading up 5 pence, or 2%, at 217 pence, outperforming a 0.5% gain in the Dow Jones U.K. Smaller Companies index. Zetar expects to seal a new four-year bank facility with HSBC Holdings PLC (HSBA.LN) by September, which it said is at competitive rates and will provide the funds needed to support its growth plans. "It will be more expensive than our old facilities but they were put in place when things were much different to now and everybody was getting very aggressive rates," Finance Director Mark Stott said. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] Order free Annual Report for HSBC Holdings plc Visit http://djnweurope.ar.wilink.com/?ticker=GB0005405286 or call +44 (0)208 391 6028 (END) Dow Jones Newswires July 21, 2010 08:34 ET (12:34 GMT)