Finsbury Food Group said today (26 November) that it expects its operating margin to fall by 1% to 2% for the year on increasing levels of promotional and product support and investment in its brands.
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The company said its margins were hurt by input costs, which remained “significantly higher” than at the start of 2007.
“There is no doubt that this has been a demanding trading period for the group, with recovery of input price inflation proving more difficult than we anticipated,” chief executive Martin Lightbody said in a statement.
The baked goods manufacturer said revenue for the group continues to grow, with sales for the 20 weeks to mid November 11% ahead of the same period last year – 7% of this attributable to acquisitions made during the last financial year.
Sales in the company’s cake division are up 3% year-on-year. Finsbury noted that the rate of growth has slowed versus last year and said it is supporting this with an increased level of promotional activity.
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By GlobalData“Trading between now and the financial year end remains difficult to predict given uncertain customer and consumer behaviour,” Lightbody added. “However, I am confident that, as commodity prices ease and our internal efficiency programmes are delivered, the group will be better placed to meet the challenges which lie ahead.”
