Finsbury posts growth in ‘challenging’ market

By James Ridler contact

- Last updated on GMT

Cake and bread maker Finsbury posted sales and profit growth in a ‘challenging’ market
Cake and bread maker Finsbury posted sales and profit growth in a ‘challenging’ market

Related tags: Investment

Speciality bread and cake manufacturer Finsbury Food Group has grown profits and sales in its latest financial results, despite “current challenges facing the industry”.

The company saw profits rise by 4.2% to £17.4M, on a like-for-like basis, in its preliminary results for the year ending July 1 2017. Adjusted profit before tax was up 5.6% to £16.6M, compared with last year.

Adjusted earnings before interest, depreciation and amortisation (EBITDA) grew 2.7% to £24.9M.

Finsbury saw a smaller rise in sales in its last financial year, growing by 0.3% to £314.3M from £313.5M last year.

Adjusted earnings per share were up 2% to 9.8p on a like-for-like basis, with a final dividend per share of 2.0p – making total dividend for the year 3.0p, up by 7.1%.

‘Current challenges facing the industry’

Finsbury chief executive John Duffy said: “The results show strong resilience to the current challenges facing the industry and this strong performance – which has seen sales increase and profit margins improve – is testament to our long-term focus on driving efficiency and scale across the group. 

“Investment to date has paid off and the initiatives implemented during the year will continue to ensure that we maintain our robust position as a low cost and leading speciality baker in the UK over the next 12 months and beyond.”

The company’s capital investment of £12.5M included a new cake line at its Cardiff factory – which Finsbury expected to be operational in the 2017/18 financial year – and standardising practice across all sites in the business. 

‘Positive impact’

“Our European growth has also been particularly pleasing,” ​Duffy continued. “The positive impact that these sales have had on the overall group performance demonstrates the advantages of having a geographically diverse portfolio. 

“Our management team has proved its ability to remain competitive and nurture long-term relationships with brands and customers. Although the challenging market conditions seem set to continue, we are confident that our focused and forward thinking strategy will drive us through.”

Duffy also confirmed it was in consultation over the planned closure of Finsbury’s Grain D’Or pastry factory in London, after it failed to stem its losses.

Although improvements had been made, the ongoing pressures from commodity and labour cost increases made it difficult for the business to maintain customer contracts.

Last month,​ reported the closure would put 250 jobs at risk.

Finsbury results – at a glance

  • Profit rose 4.2% to £17.4M
  • EBITDA grew 2.7% to £24.9M
  • Sales grew 0.3% to £314.3M

Related topics: Bakery

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