UK cake maker Finsbury Food has said that its Memory Lane Cakes trading subsidiary, based in Cardiff, has seen underlying sales for the first half to 31 December increase by 20% on the previous year.

Memory Lane Cakes also had its highest Christmas sales level to date, with year-on-year sales of Christmas lines doubling. However, Finsbury Food said this level of activity had exhausted the local supply of suitable labour leading to significant inefficiencies in the manufacturing processes. Together with rising raw material costs this has resulted in a substantial reduction in forecast profitability compared to the directors’ earlier expectations, the company said.

Finsbury Foods said it was implementing several initiatives to reduce its exposure to these types of trading issues. The initiatives include new capital expenditure and an overhaul of operating processes at the Cardiff facility. The company also said that negotiations are continuing with major customers over price increases. 

Finsbury Food also announced that the first products from its exclusive, five-year partnership agreement with Nestlé UK will be launched at the end of this month.