Finsbury Foods profits dented by cost inflation but price hikes lift Mary Berry baker to double-digit sales growth
- First-half revenues rose 15% to £191m but operating profit was flat at £6.5m
- UK bakery sales to grocers and catering companies rose 13%, overseas up 23%
The speciality baker behind Mary Berry’s cake range Finsbury Food has posted double-digit sales growth, but it warned of challenges as profits were hampered by cost inflation.
Finsbury hailed an ‘encouraging’ first half performance, with revenues rising 15 per cent to £191million, thanks to higher prices.
However, operating profit was flat at £6.5million, which the AIM-listed group told mainly attributed to higher input costs eating into margins.
Finsbury Food, which makes Mary Berry ‘s cake range, said high costs dented profit
Finsbury, which makes cakes, bread, buns and morning pastries, supplies all major supermarkets, as well as wholesale caterers and restaurant chains. The company is known for the quality of its produce.
UK bakery sales to grocers and catering companies surged 13.2 per cent to £161million, as operating profit rose slightly to £4.8million from £4.7million a year before.
But the group flagged lower operating margins, which it said reflected the ‘recovery of inflation challenge’ as costs for raw ingredients spiked.
The group’s UK foodservice division, which supplies catering companies and restaurants around the country, saw sales rise 22 per cent in the last six months of 2022.
This part of the business was badly hit during the pandemic, but has seen a strong bounceback in demand since the easing of Covid restrictions.
Meanwhile, its UK retail arm, which supplies supermarkets and other retailers, saw sales jump 10.9 per cent.
Overseas sales, which include France, Poland, Scandinavia and the US, rose 23.4 per cent to £30million, but again margins were squeezed by higher input costs, as well as a change in the product mix.
Finsbury said it was seeing steady demand for its products, but warned that macro-economic challenges – namely high inflation and low consumer confidence – continue to persist.
Finsbury Group shares fell 3 per cent to 96p, though the stock has risen by around 13 per cent over the last year.
Chief executive, John Duffy, said: ‘We have seen a stable performance in UK retail, ongoing recovery in UK foodservice and continued growth in our Overseas division all despite the challenges of continued significant input cost inflation and falling consumer confidence.’
And added: ‘Looking ahead, we expect to continue to navigate a challenging macro environment as inflationary pressures look set to persist, with the short-term outlook remaining difficult to predict.
‘However, Finsbury is now a nimble and adaptable group and I am confident that we remain well placed to continue successfully executing on our strategy.’
