UK: Costs hit Finsbury Food Group margins

By Sam Webb | 24 November 2011

Finsbury has announced increased sales in a trading update

Finsbury has announced increased sales in a trading update

UK cake and bread manufacturer Finsbury Food Group has seen margins squeezed by input costs in the first four months of its financial year.

At its AGM today (24 November), chairman Martin Lightbody said sales for the four months to 2 November had increased 17% to GBP68.3m (US$106m).

However, Lightbody called the economic environment "challenging" and said Finsbury has been hit by high raw material prices. Sales and efficiency initiatives had partially offset the cost but he admitted operating margins were "lower" year-on-year.

Finsbury's sales growth was split evenly between the UK cake, bread and free-from businesses and Lightbody Europe, Finsbury's 50%-owned joint venture export business, Lightbody said.

However, the company forecasts year-on-year growth will slow due to increased promotional activity levels and a year passing since 2010's product launches.

Chief executive John Duffy said: "The group has continued to grow and improve despite this most difficult of trading environments, which is encouraging. We continue to innovate and adapt our quality product ranges so that they remain affordable for shoppers and consequently, their popularity has proved enduring.

"While a difficult balancing act, the management and staff continue to improve and optimise the group's resilient performance despite these headwinds."

In September, Finsbury, which makes cakes under licence for companies like Nestle and Thorntons, reported a 37.9% increase in annual profit after tax to GBP4.5m. Sales grew 12.6% to GBP189.6m. It said, however, that clawing back costs in the next year was "imperative".

Sectors: Bakery, Confectionery, Financials, Private label

Companies: Finsbury Food Group, Nestle, Thorntons

View next/previous articles

Currently reading -

UK: Costs hit Finsbury Food Group margins

There are currently no comments on this article

Be the first to comment on this article

Related articles

Focus: FDA restates intentions on nutritional food labelling

The FDA's recently announced 2012-2016 strategic plan includes specific reference to both front-of-pack nutritional labelling and reform of the nutrition facts panel. Details of how the FDA plans to proceed remain sketchy, Ben Cooper writes, but the fact that these two items are firmly on the policy agenda ensures a lively debate will continue and possibly intensify during the coming few years.

MOROCCO: Nestle looks to boost Moroccan milk production

Nestle has entered into a partnership with the Moroccan authorities in a bid to boost its milk collection and production in the region.

In the spotlight: Hard work ahead for new Weetabix owner Bright Food

Ambitious Bright Food, the Chinese state-backed food group, missed out on previous Western targets like United Biscuits and Yoplait but it has planted a flag in Europe with the acquisition of a majority stake in UK cereal manufacturer Weetabix. The deal could give Bright Food some Western expertise to apply to its domestic business but, as Dean Best reports, its faces a challenge in building the brand in China, where it remains early days for breakfast cereal.

Welcome to the home of food information, insight & intelligence

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page