Zetar ceo says latest acquisition is only the start...

Derwent Lynton, a £4.2 m turnover business based in Derby, makes a range including chocolate eggs, beans and drops. It supplies UK own-label customers and customers in 23 countries overseas. For the year to June 30 2010, it posted an operating profit of £114,000.

Blackburn told FoodManufacture.co.uk that Derwent Lynton was a complementary business to Zetar’s existing confectionery subsidiaries, including Norfolk-based Kinnerton. Its overseas business was also of interest as Zetar plans to grow its presence in export markets.

Looking at efficiencies​

He said the deal, that could be worth up to £800,000, came as Derwent Lynton md David Bevan was due to retire; he has now left the company, which will be managed by Zetar confectionery md Richard Reilly.

“There will be efficiencies following the acquisition and in the longer term we will be looking across our confectionery business to work out what products are best made where,"​ Blackburn said.

He added: “The banking crisis is still having a major impact on business and the smaller players are finding it difficult to secure funds to expand. We will act as a consolidator; we are looking at a number of opportunities for further acquisitions at the moment.”​

Zetar was now in a prime position to expand, he said, after experiencing turbulent times when the recession hit in 2008. The company saw sales up 6% to £60.3m in the year to October 31, 2010, with pre-tax profit up 10% to £2.4m.

On the front foot​

“We enhanced our debt facilities at Zetar last year and also recruited a new finance director. We are now on the front foot,”​ said Blackburn. “The business had a good year last year and we are looking to grow again this year​.”

Zetar was set up in 2005 and quickly made five acquisitions in confectionery and snack food or related markets, the first of which was Kinnerton Group, a leading UK manufacturer of novelty and niche chocolate confectionery, in April 2005.

Following the recession, Zetar switched its focus from premium to economy and budget lines to boost trading, especially after the collapse of Woolworths in 2008.

Turnover was £131.9m in the year ending 30th April 2010, while pre-tax profit were £4.3m. Zetar will pay a maximum consideration of £800,000 for Derwent Lynton, including £500,000 cash paid on completion of the deal.