24th Jan 2014 10:00
LONDON (Alliance News) - Finsbury Food Group PLC Friday said it expects to report a higher first-half pretax profit in line with market expectations, as it managed to offset higher input costs with internal cost cutting, but it warned that the rising costs will hit its second-half performance.
In a statement, the maker of cake and bread bakery goods said it had managed to offset higher costs for the likes of butter and chocolate, as well as general cost inflation, by cutting costs and improving its efficiency.
It said revenues for the half year to December 28 fell to GBP86.6 million, from GBP88.2 million a year earlier, after it sold its Free From business in February last year. UK bakery business sales fell 2.1% or GBP1.6 million, but revenues from its European joint venture were flat.
"The board remains confident of reporting a year-on-year improvement in pretax profit but believes general cost inflation will impact the group's performance during the second half of the financial year," the company said in a trading update.
Cenkos Securities is forecasting the company will make a pretax profit of GBP6.30 million for year to end-June, according to MorningStar. The company reported a pretax profit from continuing operations of GBP6.65 million in its last financial year, and a pretax profit of GBP3.0 million in the first half of that year.
"Whilst the trading environment remains tough in the short term, in line with our stated strategy, our low level of debt and interest cost allows us to make significant investment in our factories and businesses for the future," Chief Executive John Duffy said.
Finsbury said its planned cake capital investment programme is progressing well, with the new cake slice 'snap pack' packaging format launched and further snacking cake automation investment on track for year end completion.
It added that the Nicolas and Harris bread facility expansion is being commissioned this month.
The company's shares were down 3.9% at 52.6 pence Friday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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