Shares in UK cake maker Finsbury Food Group tumbled today (24 January) after the company warned higher costs will hit its performance in the second half of its financial year.
In a trading update for the first six months of its fiscal year, Finsbury said it expected to report half-year profits “in line with market expectations” despite pressure on costs and lower revenue.
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Sales in the first half of the year to 28 December totalled GBP86.6m (US$143.5m), down from GBP88.2m in the comparable period of last year. Bakery sales were down 2.1% in the UK, while joint venture Lightbody Europe remained flat on the year.
Cost inflation of ingredients such as butter and sugar put pressure on margins but was mitigated by “internal efficiency investment”, the company said.
The company said it remained “confident” of posting a “year-on-year improvement” in pre-tax profits.
However, Finsbury warned “general cost inflation” would “impact” the company’s performance in the second half of the year.
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By GlobalDataThe company, which makes cakes under licence for brands including Nestle and Thorntons, said it would look to protect volumes and look to reduce overheads.
Shares were down 5.94% at 51.5p at 12:15 GMT.
