Finsbury Food Group's profits rise but 'no respite expected' in marketplace
The UK-based group’s revenue was up 16% to £102m (€122m) for the six months ending 31 December 2011 which was put down to “both volume and price rises”.
The firm said they “do not expect any respite in commodity or general cost inflation in the near term” and are continuing to plan appropriately, to “minimise the price rises required to offset inflation.”
UK market needed support
Sales in the cake division were up 19% to £76.4m (€91.6m), although the UK market had needed “increased promotional support to remain competitive and deliver growth in the current marketplace.”
During the reporting period, margin dropped from 3.6% to 3.4% due to significant raw material and cost inflation.
The group said their bread and free from range, up 8% to £25.6m (€30.7m), reflected “significant developments in free from including new Genius products and growth in brands, such as Vogel's”.
The company said while they see “exciting organic growth opportunities”, its short term focus was on “integrating and growing its existing businesses”.
John Duffy, chief executive of Finsbury Food Group, said the results were pleasing considering the pressure from “high commodity and input price inflation”.
“With this in mind, we are focused on driving both efficiency and productivity to mitigate against the negative margin impact of these pressures, and believe that the measures we are taking will continue to bear fruit,” he said.
The firm said the current environment remains “difficult to predict” but product growth opportunities mean expectations for the full year are “in line with our previous guidance.”
Duffy added:"Our priority is to further invest in the business to ensure that the growth momentum continues and look forward to both driving further shareholder value and reaching our next sales milestone."
The firm said the trading environment “remains very tough” but they were continuing to improve operating efficiencies and drive growth to “mitigate against these headwinds.”
Sales in the cake division for the first eight weeks since the half year were 5% ahead of the same period last year while bread and free from grew by 16%, resulting in total group growth of 8%.
It added it expected profitability to be higher in the second half (of the half year), partly as a “result of higher Easter seasonal sales.”