Cake manufacturer Finsbury Food Group has reported full-year sales increases in all of its subsidiaries but warns commodity costs are continuing to hit the business.

In a trading update for the year to June 2008, sales rose 11% in Finsbury's Memory Lane Cakes business, 14% in its combined California Cakes and Campbells Cakes division, 19% in its Nicholas and Harris unit and 11% in Lightbody Group.

A time lag in gaining price increases from customers meant group margins had been reduced by £1.5m but this had been compensated for by strict overhead cost control, Finsbury added.

“The underlying fundamentals of the group remain strong and the board still expects growth in earnings during the coming 12 months,” said CEO Dave Brooks. “However, this is likely to be slower than the growth achieved recently due to inflationary pressures and the uncertainty in the spending patterns of consumers.”