The company's balance sheet has been transformed following the £21 million sale of its gluten-free business to Lucinda Bruce-Gardyne's Genius Foods in March.
A net cash sum of £17.1m was realised from the deal, with £3m more to follow in February 2015, which helped to cut net debt from £33.9m to £7.4m in the 52 weeks to June 29.
The trading year saw Finsbury's revenue from continuing operations slide from £178.9m to £176.6m, partly as a result of lower overseas turnover because of exchange rate fluctuations.
However underlying profit before tax increased from £4.6m to £5.5m. The company - which has its registered office in Cardiff but employs more than 1100 Scots at facilities in Hamilton and Twechar, East Dunbartonshire - said gross margins improved from 25.6% to 26.3% as a result of less volatility in commodity prices, a focus on cost control and operational improvements.
A final dividend of 0.5p was proposed bringing the total for the year to 0.75p.
Scottish chairman Martin Lightbody said: "The market is beginning to view our story afresh, assessing the current management team on its own merits, recognising the inherent value that lies in this business. Our attention is starting to turn outwards.
"It is always convenient, especially for a group with a track record of acquisitions, to return to [merger and acquisition] activity once the balance sheet has been restored.
"Seeking deals that offer the right synergies and appropriate benefits is clearly attractive.
"While this offers a quick way of progressing the size of the Group, nurturing existing businesses remains the priority. Investment will build upon the foundations we have created, bolt-on acquisitions driving long-term value as and when opportunities arise."
Finsbury makes cakes and breads for supermarkets as well as under licence for brands including WeightWatchers, Thorntons, Nestle and Disney. The Spiderman range was the biggest selling celebration cake in the UK in the year, bringing in more than £2m of sales while products with boy band One Direction were also popular.
Finsbury chief executive John Duffy said The Thorntons cake business had grown by 20% while cakes based on Marvel superhero films "continued to thrive".
A new long-term lease adjacent to its bread making factory in Salisbury, Wiltshire, gives an option to increase production capacity there by up to 60%.
Shares in Finsbury closed down 2p, or 2%, at 74p.