UK: Warburtons profits hit by higher promotional levels
Warburtons' profits were hit by higher promotional levels
UK baker Warburtons saw profit decline during 2010 as it worked to maintain market share through increased promotions and pricing actions.
The company said that for the year ended 25 September 2010, profit on ordinary activities after tax was down 32.6% to GBP12m (US$19.3m). Sales declined 3.6% to GBP492m.
In a Companies House Report, Warburtons said that its underlying trading performance was "not as strong" as in the previous year.
"The difficult economic environment continued and resulted in an increased level of commercial result through promotions and pricing in order to maintain our market share position," the company said.
Warburtons said that raw material and consumable costs were down 5% over the previous year but it highlighted "significant" levels volatility in the wheat and energy markets. The company said that with the consumer environment remaining challenging, cost recovery from these volatile input costs is "difficult".
The company, meanwhile, said the July 2010 fire at its Bolton bakery was subject to a GBP3m insurance claim, which remains ongoing.
However, Warburtons emphasised that the fire did not impact service and that reinstatement of the plant is underway.
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