Finsbury Food Group is Optimistic
Finsbury Food Group, the UK manufacturer of cake and speciality bread, has reported a 5% increase in operating profit to £2.6 million on revenue from continuing operations down 1.8% to £86.6 million for the six months ended 28 December 2013.
Profit before tax from continuing operations rose 50.6% to £2.1 million. Finsbury sold its Free From business in the prior financial year, on 27 February 2013 for a total value of approximately £21 million to focus on its core bakery business.
The UK Bakery business saw a decline of 2% whilst sales in the Overseas business Lightbody Europe (LBE), Finsbury’s 50% owned subsidiary export business, remained stable year on year. Cost inflation in key ingredients such as butter and chocolate combined with general cost inflation continues to put pressure on margins. The Company has however mitigated this pressure with internal efficiency investment and a cost reduction focus.
John Duffy, chief executive of Finsbury Food Group, comments: “I am pleased with the progress made in what has been a transitional year for the group. The sale of the Free From division, consequent group restructuring and capital investment have transformed the balance sheet and provided the group with the strong foundation on which it is operating.”
He adds: “Whilst the trading environment remains tough in the short term, our low level of debt and interest costs allow us to make significant investment in our factories and businesses for the future, in line with our stated strategy. We believe that although the consumer markets remain challenging, an improvement in consumer behaviour lies ahead, and the group is in a strong position to mitigate against these wider market challenges and focus on its strategy for growth.”
Within Finsbury’s UK Bakery sector the planned capital investment programme is progressing well with the new cake slice ‘snap pack’ packaging format was launched and further snacking cake automation investment on track for year end completion. Similarly the Nicolas and Harris bread facility expansion was commissioned in January 2014. These and future capital investments will underpin further internal efficiency and capacity improvements to support sales growth in the coming years.
