Finsbury Food annual profit in line despite rising costs

Finsbury Food said it expected annual profit to meet expectations despite what the baker described as unprecedented increases in the cost of labour and ingredients.

In the year to the end of June group sales at businesses operating for a year or more rose 2.4% to £290.2m. Revenue including bakeries that closed in the first half of the year fell 3.4% to £303.6m.

Finsbury, which makes bread, cakes and other baked products, said it was “confident of delivering profits in line with market expectations” in difficult circumstances.

“In what has been a very challenging environment with unprecedented commodity and labour inflation, the Group has done well to recover those cost pressures,” Finsbury said.

The company did not go into detail but in previous statements it has cited government-ordered wage increases and the rising price of commodities such as butter for increased costs.

Finsbury said it had recovered cost increases by being more efficient and increasing prices. Like-for-like sales at its core UK bakery business grew 2.8%, ahead of the wider market while its smaller overseas division declined 0.7%.

Finsbury, which makes cakes featuring characters such as Peppa Pig and Spider-Man, said the UK economic environment remained challenging and showed little sign of easing. But the company said its strong balance sheet would allow it to invest to achieve growth and improved shareholder value “over the period ahead”.

John Duffy, Finsbury’s chief executive, said: "We are pleased with the resilient performance of the group in what has once again been a period of market-wide inflationary pressure, illustrating that the work and investment undertaken in prior periods has continued to bear fruit. The group is robust, well diversified and in a strong position to continue to deliver on its strategic objectives.”