Cake maker Finsbury Food Group has reported relatively flat sales for the half year to December 29, up marginally to 103.3M compared with 102M for the same period of the previous year and in-line with management expectations.
Finsbury's UK Cake business grew 2% to 1.1M, broadly in line with the market, although Lightbody Europe, its 50% owned joint venture business, declined by 1.6M or 17%, which it attributed to adverse exchange rate movements.
The group's bread and free-from division continued to deliver strong growth an increase of 1.8M or 7% compared with the year before, to give total sales of 27.4M.
Value conscious and deal focused
Finsbury's senior management said they expected the trading environment to remain unchanged for the second half of the year, and noted that consumers remained under considerable financial pressure and continued to be value conscious and deal focused.
Finsbury said key ingredients such as sugar, eggs and flour were inflationary, as were general costs such as energy. However, a focus on internal efficiency improvements as well as sales growth and recovery of commodity inflation via pricing had slightly improved first-half operating margins, but they still remain low.
Chief executive John Duffy said: "Following last year's significant sales growth ahead of the markets in which we operate, I am pleased with the resilient growth and efficiency improvements delivered in the first half across the group businesses in what has been a tough marketplace.
"November's successful equity raise, the first for five years, will accelerate our efficiency investments in the largest cake business while enabling us to meet our strengthened target balance sheet during 2013. I am confident this is the best response to the continued market challenges ahead."
