UK cake maker Finsbury Food Group said today (26 September) that clawing back costs is “imperative” despite reporting an increase in annual profits.
The company said it has seen “unprecedented pressure” from commodity costs over the last 12 months and added it would look to recover costs.
“Commodity prices for sugar, flour and butter have reached record levels and have inevitably impacted on our operating margins. Rising sales together with savings from efficiency projects have largely offset the impact of commodity price inflation but recouping costs has become an imperative,” Finsbury chairman Martin Lightbody said.
Lightbody’s comments came as Finsbury, which makes cakes under licence for companies like Nestle and Thorntons, reported an 8% increase in adjusted pre-tax profits for the year to 2 July. Adjusted pre-tax profit, which excludes one-off items, was up 8.3% at GBP5.8m (US$9m). Profit after tax increased 37.9% to GBP4.5m.
Finsbury’s revenue was up 12.6% to GBP189.6m thanks to increasing cake sales and higher sales from bread and free-from products.
Chief executive John Duffy said Finsbury had returned to organic growth despite higher commodity costs but he sounded a note of caution about the new financial year.
“I am delighted that we have succeeded in steering the group through another demanding year. The reality is that testing times still lie in wait. However, our distinctive range of products, commitment to value and robust performance in a testing climate bode well for the challenge ahead,” he said.
Shares in Finsbury had risen 6.12% to 26p at 10:16 BST.
Click here for the full statement from Finsbury.