New launches helped Finsbury Foods deliver a major recovery in cake sales over the past year, confounding analysts’ expectations.
In a trading update for the year to 2 July, the bakery supplier said cake sales rose 12% to £139.8m – reversing a 6% dip the previous year. Finsbury said the turnaround was due to new product launches in the UK and contracts won in France through joint venture Lightbody Europe.
Panmure analyst Graham Jones described the increase as “much stronger” than expected, adding that it helped push group turnover up more than £10m above its forecast.
Total group sales increased 12.8% to £189.9m, helped by the continued success of Finsbury’s joint venture with gluten free bread maker Genius Foods.
But higher ingredients costs meant profitability suffered.
“Relentless commodity price inflation on basic ingredients such as butter, sugar and flour has reduced our margins,” said chief executive John Duffy. He added that with further commodity increases likely, reformulation and further price increases might be needed.
Bread and free-from give Finsbury a lift (23 March 2011)
Finsbury sales up but egg scare takes toll (21 January 2011)