Finsbury Food FY sales flat but profit pushes up despite challenges

Cake maker Finsbury Food reported flat full-year sales on Monday but profits rose despite a challenging environment.

In its preliminary results for the year to 1 July, the company said group revenue was little changed on a like-for-like basis at £314.3m, adjusted operating profit was up 4.2% to £17.4m and adjusted pre-tax profit rose 5.6% to £16.6m. Finsbury said it had to contend with higher ingredients prices due to the weaker pound and increased costs of the new national living wage but that investments to date had paid off.

As part of the group's capital investment of £12.5m, a new cake line is coming on stream in Cardiff and there is a new IT system being rolled out which will give a common platform for the whole business. Finsbury said the benefits of these and other projects will help improve its overall productivity and offset increases in its cost base.

Adjusted earnings per share rose 2% to 9.8p and the group upped its dividend for the year to 3.0p from 2.8p a share the year before. Meanwhile, sales to Continental Europe were up 15% to £38.1m.

Chief executive John Duffy said: "The FY2017 results show strong resilience to the current challenges facing the industry and this strong performance, which has seen sales increase and profit margins improve, is testament to our long term focus on driving efficiency and scale across the group.

"Investment to date has paid off and the initiatives implemented during the year will continue to ensure that we maintain our robust position as a low cost and leading speciality baker in the UK over the next 12 months and beyond."

At 1306 BST, the shares were down 1.7% to 99.50p.