Soaring input costs have slashed profits at baker Warburtons, though it has continued to grow sales in a “very competitive” market.

The Lancashire-based brand grew sales by 6.7% in the year to 24 September as volumes remained “strong”, showed newly filed annual accounts.

However, operating profits fell back almost £10m from £22.4m to £12.8m as soaring input costs hit margins.

The group said its headline revenues were boosted by NPD and growth of its strategic partnerships with customers. That growth was achieved despite ongoing supply and distribution challenges during the period, which required a focus on maximising capacity during periods of high demand.

“The wrapped bakery market remains very competitive, with the underlying long-term declines in the core bread market being offset by growth in non-bread baked products,” the accounts stated.

However, Warburtons said the war in Ukraine drove significant commodity price inflation, which affected the cost of wheat, energy and fuel and hit its bottom line.

It meant statutory pre-tax profits fell 43% from £23.5m to £13.4m.

“The company also experienced a step up in costs, together with higher costs to secure service to customers during the period of shortages,” said chairman Jonathan Warburton.

“We continue to focus on the quality of product and service supported by the ongoing development of new product ranges. Investment is focused on enhancing our capability to meet changing consumer trends and deliver productivity.”

“This continuing innovation and investment in new capability will ensure we are well placed for future progress.”

Data from The Grocer’s Britain’s Biggest Brands showed the impact of rising costs in 2022. Average pack prices rose by 9.1%, translating into an extra £45.5m of value sales despite a 2.5% dip in volumes.

The group said it had worked to limit further increases, such as cutting the breads in Soft Pittas from five to four in January while keeping the price the same.

Warburtons said the cost of living crisis was continuing to impact the sector and wider market and it “continues to monitor this impact”.