In its pre-close trading statement released today (January 24), the firm confirmed first half group sales revenues of £86.6M, compared with £88.2M in the same period of last year. The result followed the sale of its free-from business to Genus Foods for £21M in February 2013.
Finsbury noted that the UK bakery business fell by 2.1% to £1.6M, while Lightbody Europe, its 50%-owned joint venture business was flat year-on-year. “Cost inflation in key ingredients such as butter and chocolate combined with general cost inflation continues to keep pressure on margins,” said the firm.
But that had been offset by the firm’s investment in internal efficiencies and a focus on cost reduction, it added.
Cake automation investment
Planned capital investment in its cake manufacture was progressing well – with the new cake slice ‘snap pack’ packaging format launched and further snacking cake automation investment on track for completion by the end of the year.
The Nicolas and Harris bread facility expansion will be commissioned this month. “These and future capital investments will underpin further internal efficiency and capacity improvements to support sales growth in the coming years,” claimed the firm.
The board said it remained confident of reporting a year-on-year improvement in profit before tax but warned general cost inflation would impact performance during the second half of the financial year. In response, Finsbury planned to invest in “up-weighted market activities” to protect volumes and undertake an overhead reduction programme, to be completed in the second half.
Overhead reduction plan
The full benefits of its overhead reduction plan would be seen in the next financial year, it said.
John Duffy, chief executive of Finsbury Food Group, said the trading environment remained tough in the short term. “In line with our stated strategy, our low level of debt and interest cost allows us to make significant investment in our factories and businesses for the future,” said Duffy.
“In a transitional year following the sale of the fast growing Free From division and consequent group restructuring and capital investment, I am pleased with the progress made and believe we will enter next fiscal in a stronger position for the eventual improvement in consumer market behaviour ahead.”
Meanwhile, last month Crawford Currie stood down from the board of Finsbury Food Group and as finance director of the Lightbody Group.