Finsbury Food: Group revenue up 6,0 percent in H1/2011

London / UK. (ffg) Finsbury Food Group PLC, a leading manufacturer of cake, bread and gluten free bakery goods, is providing an update on trading for the first half of the current financial year, ended 01 January 2011, prior to entering into its closed period.

Group revenue was up 6,0 percent compared with the same period last year reversing the decline of the last full year. There were no acquisitions or disposals during the period.

Sales in the Bread and Free From division accounted for the majority of the Group´s growth; up 14,5 percent on prior year, driven by strong growth from the Genius brand in the fresh gluten free market and the Vogel´s brand in the speciality bread market. As reported some weeks ago, the Group, through its United Central Bakeries and Livwell subsidiaries, entered into a new contractual joint venture agreement with Genius Foods Limited, its existing partner and owner of the Genius brand, to further expand its free from product portfolio.

Sales in the larger Cake division are up 3,2 percent versus the first half of last year. UK market and export sales have both shown growth although the former has required increased promotional support levels to remain competitive and deliver growth in the current marketplace.

The company continues to steer a cautious path through difficult times. The operating environment is constantly evolving but continues to be very challenging with commodity price and cost inflation pressures on one hand and fragile consumer confidence impacting spending on the other. Finsbury´s internal efficiency programmes across the business remain key in its meeting these external challenges.

During January, the German fresh egg dioxin scare in the Memory Lane cake business has resulted in a challenging start to the second half of the financial year. Although the products were safe to consume, cakes were removed from shelves by retailers as a precautionary measure. The fact that there was no public health risk, has led the company insurer to challenge recovery of any associated withdrawal costs. The company is currently in discussions with the insurer, retailers and the egg supplier to resolve the issue.

Whilst the consumer and inflationary environment remains difficult to predict, the company continues to see new product growth opportunities within its businesses and, after six months, are trading in line with expectations.