UK cake maker Finsbury is facing growing margin pressure as a result of higher input costs, CEO John Duffy revealed today (24 July).

Finsbury booked a 9.4% increase in sales for the full year to 30 June, which rose to GBP207m (US$321m). Cake sales, including cakes exported to Europe through Lightbody Europe, rose 9.2% while bread sales were up 10%

However, speaking to just-food following the release of Finsbury’s trading update, Duffy said the firm had seen “significant year-on-year cost inflation” in sugar and eggs. “A number of other commodities are increasing in response to recent weather issues worldwide,” he added.

In order to offset these costs, Finsbury is looking to reduce operating expenses while also adjusting prices accordingly.

Duffy commented: “The group has a continuous improvement approach to all costs, with a number of labour and waste projects under way – some with significant capital investment.

“The cost and price of individual products will be continuously reviewed in light of the commodity inflation experienced and efficiency improvement achieved.”

Duffy also revealed Finsbury expects its sales growth to slow as it laps the product launches and contract wins achieved in 2011.

“We do expect our recent strong growth to moderate more in line with that of the markets we operate in,” Duffy conceded.

However, he emphasised Finsbury remains focused on driving growth in the coming year.

“Our primary focus will continue to be innovation-led; concentrating on core areas such as celebration cake, speciality breads and free from. We are currently driving Spider-Man licensed celebration cakes to coincide with the film’s UK release.”