Warburtons’ boss Jonathan Warburton said the positive results came despite difficult trading conditions, which resulted in an 8.5% increase in raw material costs because of the rising price of wheat.
“The main focus of the business remains on growing the share of the bakery market in Great Britain, he said in his directors’ report filed with Companies House. “It is recognised that this can only be achieved by developing new product ranges alongside our current market leading lines.
“Sales of wraps, sandwich thins and gluten-free products have all continued to progress well in the period, as a result of on-going investment in plant capability.”
Earlier this year, the family-owned firm invested £20M in a new bakery dedicated to its sandwich alternatives lines at its site in Burnley, Lancashire.
The Bolton-based business will continue to develop its brand to offset volatility in the sector, Warburton added.
“We are exposed to commodity markets, principally wheat and energy,” he claimed. “The level of volatility remains significant within these cost areas and with the consumer environment remaining challenging cost recovery is difficult.”
An uncertain economic climate, changing consumer trends and an increasingly competitive market has also impacted the business, it said.
Increase in operating profit
The firm drove a 52% increase in operating profit before exceptional items to £34.56M, in the 52 weeks to September 28 2013. Turnover was up by 7.3% to £562.1M over the past year.
Profit before tax of £36.3M was lower than the before tax of the previous period of £75.9M. No dividends were received, paid or proposed in the period. Whereas, in the previous period, a dividend of £55M was received from a subsidiary and the company paid dividends totalling £55M to the parent company.
At the end of the period, the business held cash of £28.3M compared with £1.3M in the previous year.
Employee numbers were also down on the previous period, from 4,546 to 4,534 – despite the firm claiming its Burnley factory would create 60 new roles.
Meanwhile, Warburton told FoodManufacture.co.uk in an exclusive podcast that innovation was “vital” in a retail market increasingly dominated by discounted retailers.