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The people not eating cake
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25/11/2009
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Finsbury Food Group, a manufacturer of cake, bread and morning goods, told shareholders today that the recession was causing customers to cut bake on cakes but it would utilise its production flexibility to adjust to demand.
In a trading update issued at the AIM-listed company's annual meeting, chief executive John Duffy said that in the first 17 weeks of the current financial year ending 30 June 2010, consumer behaviour was still being affected by the recession and its premium range sales had been affected. He went on: "The economic environment remains challenging and uncertainty around input price inflation remains high. We continue to focus on integrating our businesses to improve efficiency and operating margins whilst gaining an improved understanding of our consumers."
Finsbury's bread and 'free from' businesses continued to achieve double digit growth year on year and its acquisition of the speciality bread maker Goswell at the end of the last financial year had increased
However, sales in the larger cake business declined by 6% in value, slightly ahead of the overall cake market which declined by nearly 4% over the last 12 weeks. In addition to increased promotional investment, Finsbury said it had jettisoned some low margin products as it integrated its cake businesses.
As a result, group revenue has fallen year on year with sales for the 17 weeks to the end of October 2% behind the corresponding period last year.
The company said that the integration of its businesses had improved efficiency, product quality, and customer service. It would continue to adjust to market and customer demand by "utilising our highly skilled, innovative and flexible production capability".
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Author
Ken Hurst
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