Brumby’s up 8 per cent with half year result

March 14, 2007

Brumby’s up 8 per cent with record half year result as consumers shift from supermarkets

Leading Australian and New Zealand franchise Brumby’s Bakeries Limited (BSX:BBH) today reported a 7.8 per cent increase in its net profit after tax for the half year to December 31, 2006 to $1.073 million, up from $993,000 for the corresponding period the previous year.

Brumby’s managing director Michael Sherlock said the earnings increase was driven by a growth in revenue.

“Our rising revenue is being strongly fuelled by the combination of two factors, both which have made us far more competitive with our major rivals – the supermarkets,” he said.

“Firstly, the retail price of Brumby’s standard white sliced loaf is now on average less than the equivalent loaf being sold at supermarkets, with supermarket bread prices shooting up by more than 24 per cent in the last year compared to an 11 per cent rise for Brumby’s.

“Secondly, there is a growing awareness among consumers that the plant bread they have traditionally bought at large supermarkets is often days-old.

“Brumby’s expects this trend to continue as part of a growing movement among consumers searching for ‘fresh’ food”.

Mr Sherlock said Brumby’s 318 stores across Australia and New Zealand had achieved organic sales growth on average of 7.6 per cent – and up to 17 per cent in some regions - during the 12 months to December 31 as more customers were attracted to the promise of preservative-free bread baked fresh the day of purchase.

Dividend:

Recent offers to acquire Brumby’s include a specific “special dividend” as part of the offer. That dividend has been advised as 10.88 cents per share fully franked.

The Board of Brumby’s supports this dividend but will not be in a position to declare any dividend until the acquisition is approved by shareholders and ratified by the court.

ENDS

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