cake-decorations

Cake Decoration is a growing and global market with a spectrum of consumers from experts to beginners and a wide range of trade channels.

2019/2020 Performance

In a transitional year, the result for Cake Decoration was disappointing with an adjusted EBITDA lower than the previous year. This was driven by a slower than expected completion of the investment in the soft icing plant which went into production in quarter three.  This production line gives additional, large scale, manufacturing capability for frostings and other soft icing products which are becoming increasingly popular due to their ease of use for the more novice baker and decorator. UK sales came under pressure owing to the declining market for sugarpaste (-14.7%) and marzipan (-2.1%). Although Renshaw’s sales outperformed the underlying market decline, there were reduced sales in the Retail and Wholesale sectors. The manufacturing sector, although slightly behind, was showing a growing momentum in the final quarter. The International market decline was owing to one customer who reduced volumes in FY20 owing to uncertainty with Brexit. Sales to the US are down year on year owing to a change in stocking policy with a major customer.
In line with the company strategy, an agreement was signed in October 19, with Decopac, the largest distributor of cake supplies in the US, for the sole distribution rights assisting in growing our share of the US market.  The Board understand that the agreement implies significant sales targets in what we consider an important market for Renshaw in the future. During the year, changes have been made to senior management structure as well as strengthening the Marketing function to ensure the customer is at the heart of the business. Although there remain further opportunities for improvement, Renshaw remains a strong brand in the sector. Further work and efforts will continue throughout FY21 to enhance products., develop new products which delight customers and streamline our sales and operational processes.

Forward Plans

The business continues a growth strategy focused on increased supply of everyday usage and convenience products under its own and retailer brands.  The investment in the soft icings plant will benefit from the growing frostings market. The market is indicating growth of c5%1 and the expectation being that this will continue.   Export growth is focused on North America where the company has identified the greatest potential to grow sales. Following the successful closure of the Brussels warehouse in FY19 and fulfilling European sales from the UK, the closure of the US based warehouse will be undertaken in FY21 with sales being shipped directly from the factory in Liverpool to the US.

The business continues to implement organisational changes that will result in a more streamlined business, focused on the growth opportunities, as well as contributing efficiency savings and an improvement in overall performance.

COVID19

As a food manufacturer, the business has remained open during the lockdown period.  Our priority is the safety of our staff whilst supplying our customers with the highest quality product.   All required changes to meet Covid19 requirements have been carried out at the sites. The impact in FY20 has been limited with a reduction in sales in the final few weeks of FY20, across all sectors.   Some specialist retailers closed, and the major retailers were focussed on getting core commodities into the stores whilst the Wholesale Sector saw many of their own clients having to close.   An updated forecast has been prepared in light of the lockdown restrictions.    The business is currently operating in line with this forecast.

Cake Decoration includes the following businesses:

Renshaw manufacturers sugarpaste, marzipan, soft icings, mallows and caramels and sells across a broad range of sales channels: mainstream and specialist retail, wholesale, foodservice and food manufacturing as well as export.

Visit jfrenshaw.co.uk > Visit Renshaw's consumer website renshawbaking.com >

Rainbow Dust Colours produces a range of edible glitters, dusts, powders and food paints, brushes and pens for the specialist sugarcraft sector.

Visit rainbowdust.co.uk >

Renshaw Europe sells, markets and distributes both Renshaw and Rainbow Dust products across continental Europe.

Visit renshaweurope.com >

Renshaw Americas sells, markets and distributes both Renshaw and Rainbow Dust products across the Americas.

Visit renshawamericas.com >