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26 Nov 2008 07:00
Date: 26 November 2008
On behalf of: Finsbury Food Group plc ("Finsbury", "the Company" or "the Group")
Embargoed until: 0700hrs
Finsbury Food Group plc
Trading Update
Finsbury Food Group plc (AIM: FIF), a leading manufacturer of cake, bread and morning goods, is today holding its Annual General Meeting. At the meeting the Chairman will issue the following update on trading for the first four months of the current financial year ending 30 June 2009.
Revenue for the Group continues to grow year on year with sales for the 20 weeks to mid November 11% ahead of the corresponding period last year, with 7% of this growth attributable to the acquisitions made during the course of the last financial year.
Sales in our Cake division are up 3% year on year and in line with the increase in the size of the total cake market. The rate of growth has slowed versus last year and we are supporting this growth with an increased level of promotional activity. Our two smaller divisions, Bread and Free From, have achieved significant year on year growth of 18% and 26% respectively.
In September, we reported that we were seeking to recover some of the increases in our input costs from our customers. During the period of implementation of these price increases, many of these costs have continued to rise and our gross margins remain suppressed as a result. Whilst we acknowledge that the prices of some commodities are easing in relation to their peak levels, our input costs remain significantly higher than they were at the start of 2007.
As the second largest supplier within the cake market, we will continue to support our customers in providing consumers with value for money and look to grow our market share through continued development of our key retailer own brand relationships and an increased focus on the major brands we have at our disposal - Thorntons, WeightWatchers, Disney and Nestlé. Whilst we will maintain a tight control on overheads, we will invest where appropriate for the medium to long term benefit of the business, including ongoing initiatives to improve operating efficiency.
We anticipate that, as a result of increasing levels of promotional and product support and investment in our brands, our operating margin for the year will fall by between 1% and 2%. We will have a clearer understanding of our year end position when we provide a further update in the new year, following the Christmas trading period and taking account of the latest consumer trends.
We remain a strong player in our market place and the business continues to grow. We enjoy a diversified customer base and have excellent production capability and flexibility within our bakeries. Whilst it has become harder to predict consumer behaviour in the current environment, we remain confident that our high quality everyday premium brands and products will continue to be in demand.
Commenting, Chief Executive Martin Lightbody, said:
"There is no doubt that this has been a demanding trading period for the Group, with recovery of input price inflation proving more difficult than we anticipated. Trading between now and the financial year end remains difficult to predict given uncertain customer and consumer behaviour. However, I am confident that, as commodity prices ease and our internal efficiency programs are delivered, the Group will be better placed to meet the challenges which lie ahead. In the current trading environment we will rely on our core competences and our good customer relationships to deliver innovative, high quality products that meet changing consumer needs."
- ENDS -
For further information:
Finsbury Food Group Plc www.finsburyfoods.co.uk
Martin Lightbody (Chief Executive) 07778 230 220
Lisa Morgan (Group Finance Director) 07771 712 720
Panmure Gordon 020 7459 3600
Katherine Roe/Ashton Clanfield/Callum Stewart
Redleaf Communications finsbury@redleafpr.com
Emma Kane/Rebecca Sanders-Hewett/
Anna Dunkin 020 7566 6700
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