UK: Costs hit Finsbury Food Group margins
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".
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