Finsbury Food sales rise despite inflation pressures

Aim listed cake and gluten free bread maker Finsbury Food reported a 16 per cent rise in half year sales, despite pressures from commodity and input price inflation.

The Cardiff headquartered maker of Memory Lane Cakes and low fat cake slices, said both its UK 'Cake' and 'Bread & Free From' businesses saw strong growth of 10% and 8% respectively.

The combination of these businesses accounted for just over half the total group growth.

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Total pre-tax profit rose to £2.2m for the six months ended 31 December 2011 from £1.9m in the equivalent half a year earlier. Group revenue rose to £102m from £87.8m.

Sales in the Bread & Free From division rose to £25.6m from £23.6m and sales in the Cake division increased to £76.4m from £64.2m.

The group, which makes own-label cakes for retailers and Thorntons, said margins during the period fell from 3.6% to 3.4% as it grappled with rising raw material and cost inflation. Net debt fell 5% to £34.8m.

Finsbury said trading in the first eight weeks since the half-year continues to be in line with company expectations and it expects profitability to be higher in the second half, partly as a result of higher Easter seasonal sales.

Chief executive John Duffy commented, "We are focused on driving both efficiency and productivity to mitigate against the negative margin impact of these pressures, and believe that the measures we are taking will continue to bear fruit."

"Whilst the consumer and inflationary environment remains difficult to predict, we continue to see new product growth opportunities within our businesses and expectations for the full year are in line with our previous guidance."

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