Renshaw Food Group has revealed a positive performance for its premium bakery division in its financial results to 31 March 2016, announced today.

Haydens Bakery grew sales by 4% year on year, with the growth rate quickening to 12% in the second half of the year, despite a strategy to narrow its range. Product complexity remained a challenge in the division, it said, but this was being addressed with a greater focus on fewer product lines.

Revenue for the premium bakery division was £29.4m in the period compared with £28.4m for the same 2014/15 period. Profits were down £0.1m compared to -£0.4m in the previous comparable period.

The Liverpool-based company revealed that customer service in the division was excellent over the Christmas and Easter periods, but said this came at a cost of significantly increased labour, which impacted margins leading to a decline in ebitda.

In the cake decoration division, sales revenue was slightly down on the previous year, as Renshaw removed a manufacturing contract and Renshaw Europe lost a private-label contract. Revenue was £48.3m for the year to 31 March 2016 compared with £49.2m for the previous comparable period. However, operating profit rose from £5.5m in 2014/15 to £6.5m in 2015/16. Sales of the Renshaw brand grew, as the company focused on its branded proposition and the company said export sales outside Europe were strong.

For its food ingredients division, unprecedented commodity price deflation, particularly in sugar and dairy, resulted in a significant decline in revenues from £27m to £22.7m and an operating loss of £0.4m compared with a profit of £0.3m in the previous period. The company said sugar was impacted by weak world prices, but also in Europe ahead of ending the quotas in 2017, while dairy, where quotas have already ended, was hit by the Russian export ban.