Success in raising prices on its baked goods products helped boost half-year profits at Canadian food and retail group George Weston.
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The company today (29 July) booked operating income of C$592m (US$577m) for the six months to 14 June, up 10.2% on the year.
The rise in earnings came despite continued restructuring charges as the company revamps its Weston Foods unit and retail arm Loblaw. George Weston was also hit with a C$34m charge on commodity derivatives during the quarter.
The derivatives charge weighed on profits from Weston Foods business, the largest baked goods maker in North America, but price hikes and a focus on higher-margin products offset rising flour and fuel costs and helped underlying earnings.
Underlying sales from Weston Foods rose 7.2% during the first half of the year, although on a reported basis, revenue fell thanks to the strength of the Canadian dollar.
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By GlobalDataGroup sales were up 1.5% to C$15.2bn as revenue from both Weston Foods and Loblaw rose.
However, executive chairman Galen Weston said Loblaw was “behind in its plans for operating as an effective selling organisation”.
George Weston is in the process of attempting to turn around Loblaw, Canada’s largest retailer, amid growing local competition from Wal-Mart.
