Finsbury expands with Weight Watchers deal

Finsbury Foods today grabbed a bigger slice of the diet cake market following the acquisition of Weight Watchers cake supplier Anthony Alan Foods.

Anthony Alan, founded in 2001, is a sales and marketing business which holds the licence to distribute cakes under the Weight Watchers brand in the UK and Ireland.

It supplies major retailers such as Tesco, Sainsbury’s and Asda as well as convenience stores with Weight Watchers’ range of 12 health conscious cakes, including carrot cake slices, chocolate brownies and cherry bakewells.

Weight Watchers is the leading brand for low fat cakes, having grown its market share by 15% in the last year to 58%, according to market research group TNS.

Finsbury’s chief executive Dave Brooks said the deal will boost its presence in the low fat cakes sector – where he believes there is significant growth potential.

Finsbury’s California Cakes division, based in Lanarkshire, already makes around 60% of the cakes distributed by Anthony Alan under the Weight Watchers brand.

Mr Brooks said Finsbury will concentrate on extending and revamping the current range. He added that the deal will not affect Anthony Alan’s 11 staff based in Barnsley.

Cardiff-based Finsbury will pay £350,000 on completion of the deal, followed by a further £500,000 following the achievement of certain performance targets during the year to the end of March 2008. It will then pay up to an additional £2.9 million providing the Weight Watchers licence is renewed for a further three years in November 2009.

Weight Watchers is currently the 14th largest food brand in the UK. Senior vice president Melanie Stubbing said that with Finsbury’s support, the firm hopes to break into the top ten.

Panmure Gordon analyst Charles Hall said the acquisition was “enhancing” and as a result upped his earnings forecasts by 4%. He now expects to see earnings per share in 2008 come in at 10.4p, up from previous expectations of 10p.