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Finsbury Food Group to post profit rise

By Mike Stones+

18-Jul-2014
Last updated on 18-Jul-2014 at 12:10 GMT

Finsbury Food Group expects to post full-year profit ahead of market expectations
Finsbury Food Group expects to post full-year profit ahead of market expectations

Cake, bread and bakery goods manufacturer Finsbury Food Group expects to post full-year profit ahead of market expectations, thanks to market promotions and cost cutting, according to its pre-close trading statement for the year to June 28.

A reduction in costs – resulting from capital investment and an overhead reduction programme implemented in the second half of the financial year – had helped to offset cost inflation, it said.

Group sales reached £175.7M compared with £176.6M in the previous year, following the sale of the free from business in February 2013.

UK bakery business sales

In the UK bakery business sales were broadly flat at £153.7M, as second half growth reversed the first half fall.

Sales in Lightbody Europe, Finsbury’s 50%-owned European business, fell by 1.2% for the full year to £22M. But the fall was offset by a “favourable profit dynamic”, with a shift to higher margin business, said the business.

Finsbury said it had taken advantage of its strong balance sheet to double capital investment to move than £6M in the year to boost new capacity and innovation, while improving productivity and competitiveness.

UK bakery division capital investment projects completed in the year included the new single serve cake slice 'snap pack' line and, what it claimed to be, the world's largest cake bites robotic picking installation.

The expansion of its Nicolas and Harris speciality bread facility expansion was now fully operation and had delivered 60% additional space.

Increased final dividend

The board planned to recommend an increased final dividend of 0.75p, giving a total dividend payment of 1p for the year, compared with 0.75p last year.

John Duffy, chief executive, said: “Our continued capital investment programme is heralding positive signs and we are encouraged by the contribution that this has made.

“Although cost inflation keeps margins under pressure, the strategies we have in place have mitigated against this and with more favourable profit dynamics; we are well placed to take advantage of the market as it improves.”

Meanwhile, Peter Baker, Finsbury’s new non-executive chairman , began work at the beginning of this month. Baker previously held roles at La Fornaia Bakeries, British Bakeries, Rank Hovis Mills and Jordans Cereals.

He took over from Martin Lightbody, who left the firm after more seven years with the business.

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