FDBusiness.com

Finsbury Food Group, the UK manufacturer of cake, bread and gluten free bakery goods, has reported that the strong organic growth trend established in the first half has continued to strengthen during the second half of its financial year. This has resulted in total group revenue increasing by 12.8% to £189.9m compared with the same period in the previous year, successfully reversing the 6% decline of the last full year. There were no acquisitions or disposals during the period.

Sales in the group’s bread and free from division continued the strong growth trend of recent years, up 14.2% on prior year to £50m, again driven by strong growth from the Genius brand and latterly retailer brands in the fresh gluten free market and the Vogel’s brand in the speciality bread market. The joint venture established in December with Genius Foods to expand the fresh bakery free from portfolio continues to offer promising growth potential.

John Duffy, chief executive of Finsbury Food Group.

However, although the group has returned to strong organic growth, commodity and cost inflation has been high throughout the year and again in recent months with no sign of relief. The combination of higher sales growth and savings from internal efficiency projects only partially offset these costs to date and operating margins have reduced as a consequence. Further actions to improve efficiencies and recover these and additional commodity costs with the help of customers are already underway.

“The heavy investment of recent years in innovation, sales promotions and competitiveness has delivered sales growth of great tasting premium product ranges. However, relentless commodity price inflation on basic ingredients such as butter, sugar and flour has reduced our margins,” comments John Duffy, chief executive of Finsbury Food Group. “With further commodity increases, the challenge on an ongoing basis is increasingly to recover these costs by reformulation and price increases whilst continuing the growth.”