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Biscuit maker to raise 925,000 pounds with cash call

Robert Cole
Friday 06 August 1993 18:02 EDT
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NORTHUMBRIAN Fine Foods, the biscuit maker, is raising pounds 925,000 in a rights issue - but more than 15 per cent of the proceeds will go on related professional fees, writes Robert Cole.

News of the cash call came as NFF reported losses of pounds 5.7m for the year to 31 March, following a profit of pounds 155,000 last time.

More than pounds 4m of the loss was incurred on the sale of Lees, the Scottish biscuit maker, which NFF bought for pounds 5m in 1991 and sold earlier this year for pounds 1.1m. Lees was making heavy losses.

Kevin O'Keefe, chairman, said the rights was not an emergency measure. He said the company needed the money to fund the promotion of a new product. But he added that without the new investment NFF's performance would have been slow.

The company plans to spend pounds 300,000 on a television advertising campaign in the autumn. It will promote Dunkers, a new biscuit, which will not dissolve when dipped in tea or coffee. NFF said it has received encouraging interest in the product from supermarket retailers.

The rest of the money would be used to upgrade manufacturing capabilities.

The eight-for-25 issue, at 8p, is underwritten by Wise Speke, the Newcastle-based stockbroker. Shares closed down 2p at 14p.

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