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S.Telegraph .
Geest
GEEST (586.5p), which supplies convenience foods to supermarkets, is continuing to grow in line with best expectations.
Last week the company announced an 18 per cent rise in sales to £623m. Profits came in at £36.6m. The company launched 600 new products last year. Expect Geest to dish up more new ranges this year as it expands into the desserts market, which is growing at 15 per cent a year.
Over the past year Geest's share price has outperformed the market by 20 per cent and readers who followed our advice to keep buying the shares at 499p in September last year may be tempted to take some profits.
But remember, Geest is a good defensive hold in an otherwise volatile marketplace and sales of convenience foods look set to continue to grow. Keep buying.
Geest buoyed by new products
By Maggie Urry
Published: March 15 2001 10:45GMT | Last Updated: March 18 2001 15:50GMT
Innovative convenience food products - such as a new stir-fry ready-meal that can be made in a microwave rather than a wok - helped lift annual profits at Geest.
Ian Menzies-Gow, chairman, said Geest launched 600 new products last year as part of a strategy to deliver growth.
Geest also developed a range of Pizza Express pizzas in conjunction with the restaurant chain for J Sainsbury. It is also promising more launches this year, including one code-named FGI, which he said was a "flippin' good idea" and "is a totally new and different category".
The shares rose 16p to 558½p.
Profits before exceptionals rose 12 per cent from £32.6m to £36.6m in 2000. In 1999, Geest struck an exceptional profit of £6.7m on the sale of a business.
Sales jumped 18 per cent to £623m, with acquisitions contributing £10.9m, in spite of price deflation of 1 or 2 per cent. He said that supermarkets had now realised that price cuts had not lifted convenience food sales.
Turnover from subsidiaries in mainland Europe rose from £18.9m to £33.3m, aided by acquisitions.
Mr Menzies-Gow said more deals could be expected there but added there was "a massive cultural issue in getting [continental European] retailers to handle short shelf-life products".
Geest paid interest of £700,000 (nil) as the proceeds from the sale five years ago of its banana business have been reinvested.
Earnings per share rose from 34.7p (excluding the one-off gain) to 38.9p, while a final dividend of 9.5p (8.5p) gives a total of 15.5p (13.8p), up 12 per cent.
