Debt-free Brumby’s looks to acquisitions

Debt-free Brumby’s looks to acquisitions

November 14, 2006

Leading Australian and New Zealand bakery franchise operator Brumby’s Bakeries Ltd (BSX:BBH) announced today it would consider acquisitions after completing its debt reduction strategy next month.

Brumby’s managing director Michael Sherlock said the franchise group, which has more than 300 stores across Australia and New Zealand, had already identified several acquisition opportunities which it could pursue in the next 12 months.

“There are several food retailers who we believe could benefit from our management expertise while maximising value to shareholders,” Mr Sherlock said ahead of Brumby’s Annual General Meeting being held in Brisbane today.

“In the next year we will be investigating the opportunity to acquire other food franchise retail systems.”

Mr Sherlock said Brumby’s would be effectively debt-free in December after paying off the loan used in 2003 to buy back a 23.6 per cent stake in the company held by Goodman Fielder.

In September, Brumby’s reported a 21 per cent increase in net profit after tax for the full year to June 30, 2006 to $2.08 million, up from $1.72 million for the corresponding period the previous year.

The earnings increase was led by a growth in revenue of 19 per cent, from $8.35 million to $9.92 million, as well improved efficiencies in operating costs.

Since listing on the Bendigo Stock Exchange in December 2003, Brumby’s share price has more than tripled from $0.55 to its current price of $1.80.

ENDS

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