Shares digital

The confectionery group finds its shift to fruit and cereals commercially nutritious

by John Marshall

Confectionery group Glisten (GLI:AIM) looks set to tap into the country’s growing health awareness with the ‘healthy eating’ market now accounting for more than 50% of sales.

Last week’s finals showed how quickly the £36 million cap has been transformed with confectionery now accounting for only 44% of group turnover. The fruit and cereals division, which manufactures cereal, fruit and protein bars, generates 40% of sales with the rest coming from the rapidly growing nuts business, which stands out as the number-two brand in the snacking nut market.

Historically the group has grown by acquisitions. But it recognises this will be a year of consolidation especially as it has to pay £3.2 million to the vendors of Dormen Foods. Even after meeting this payment and funding a rise in working capital it should still be well within its borrowing limits. Brokers expect interest cover of some 4.6 times this year.

As well as the earn-out due on Dormen the group has an ambitious capital expenditure programme designed to improve efficiency and increase the capacity to manufacture the ‘healthy’ products. The increased emphasis on this market should drive organic growth.

Charles Pick of FinnCap is forecasting earnings per share of 36.2p rising to 40.2p next year, so shares, off 40% in the past year at today’s 68p, trade on a 7.2 price earnings multiple falling to 6.5.

Shares says: The rating is undemanding for a company that has never disappointed the market and should enjoy organic growth. Buy