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With the rest of the industry wailing about rising raw material costs, confectionery and snacks-maker Glisten has managed to stretch its margins and publish half-year numbers ahead of expectations.

Yorkshire-headquartered Glisten, which has diversified its product range into ‘healthier snacking’ from its origins in unhealthier confectionery, acquired two businesses during the period: nuts and savoury nibbles specialist Dormen in September, and Snacks Unlimited, a maker of low-fat snacks for Weight Watchers, in November. Both performed well in the six months and Dormen took the coveted ‘UK’s number-two nut brand’ in December.

Operating margins advanced from 10.2% to 11% as, says chief executive Paul Simmonds, some price increases were passed on to consumers, some products were ‘re-engineered’ and, in a few cases, other cheaper suppliers were found. The going was not entirely good though, as production glitches meant the cereal bars and confectionery businesses were unable to keep up with demand in the busy festive period.

This, added to an expensive re-launch of organic fruit-snacking brand Fruitus that saw it taken off the shelves for some time, knocked at least £1m off the top line. So for the six months to December, turnover swelled 13% as pre-tax profits rose 25% to £3.3m.

The second half, therefore, should see full contributions from the new additions, as well as the impact of an improved Fruitus and the launch of a joint venture of 'better-for-you' confectionery under the Skinny Candy brand. House broker Investec foresees full-year sales of £76.5m, £6.3m of pre-tax profits and 32.4p of earnings.

Generating cash and primed for further growth, Glisten’s 370.5p shares, recommended here in May 2006 at 343.5p and down from recent highs above 400p, are worth holding onto.

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Glisten	AIM	£17.93m	128.50p	-1.00p
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