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AprilAt the beginning of the month, a fireat the Geest Barton-on-Humber sitedestroyed two facilities making pastaand speciality bread. Fortunately, noone was injured. The two facilitiesrepresented less than 10% of Geest’sassets and contributed around 6%to the Group’s turnover. Geest wasinsured against the loss.On 20 April, Geest shareholdersapproved the recommendedacquisition by Bakkavör Group.The first quarter trading resultsannounced on 28 April showed agood financial performance in theover 4,500 products across 17categories with a combined turnoverof around £1 billion, operatingover 40 factories and employingapproximately 13,000 people in sixcountries.At the investor briefing in Icelandon 27 May, Ágúst and LýdurGudmundsson presented BakkavörGroup’s new long-term financialgoals. (Please turn to page 60 in ‘Ourstrategy’ section.)In order to maximise synergies andutilise knowledge and in-houseexpertise across the Group, all offirst quarter of 2005. Like-for-likesales growth was 14% with net salesamounting to £38.8 million and netincome amounting to £4.2 million –a 94% increase. Operating profit was£7.1 million, up 68%. Operations werecharacterised by good organic growthand strong cash flow.At the end of the month, BakkavörGroup’s acquisition of Geest wasagreed by the Office of Fair Trading(the UK’s competition authority).MayOn 13 May, Geest became a part ofBakkavör Group and delisted from theLondon Stock Exchange on 16 May.Payments to shareholders were madeon 27 May. The acquisition processwas completed for a consideration of£623 million.As a result of the joining of the twocompanies, Bakkavör Group becamethe leading supplier of fresh preparedfoods and produce in the UK, making40Bakkavör Group’s UK operations werecombined under the Geest operationalstructure, which remains under theleadership of Gareth Voyle.JunePlans for further integration of thecompanies were set in motion.Changes to the reporting of financialresults included new sales analysisby geographical market and productgroups (hot-eating and cold-eating).A new bond loan issued raised capitalfor further development of activities inthe Group’s markets. Barclays, whichunderwrote the acquisition facility,finished the loan syndication at theend of June.JulyBakkavör Group and Kaupthing Bankrenewed a market making agreementfor issued shares in Bakkavör Groupwith the aim of improving liquidity andenhancing transparent price formationon the Iceland Stock Exchange.AugustThe half year results were announcedon 25 August and reflected the fullincorporation of Geest into BakkavörGroup’s consolidated accounts fromMay. Pro-forma sales increased by justunder 5% to £489.5 million over thesix month period and profit for theperiod was £12.1 million, up 128%.Operating profit amounted to £24.9million – up 155%. Owing primarilyto the acquisition of Geest, BakkavörGroup’s balance sheet changedconsiderably – total assets rose nearlyfour-fold to £1,036.6 million andgoodwill amounted to £476.1 million.Cash flow remained strong with cashfrom operations at £25.3 million, up124%.