How coronavirus took its toll on Finsbury Food Group sales

Finsbury Food Group’s latest financial year has seen a marked difference in performance between the first six months and the second.

In the first half of its financial year, ended 27 June 2020, revenues rose 4.7% year on year to £159.4m.

And despite a strong start to the second half, the UK coronavirus outbreak brought a huge shift in the market and saw sales fall 9.8% over the period compared to the previous year.

As a result, revenue was down 24% year-on-year in April, 19% in May and 15% in June.

Finsbury explained that lockdown meant demand in the foodservice and food-to-go sectors, which together accounted for about 20% of the group’s revenue, fell to almost nothing overnight.

Although celebration cake sales declined, demand for some everyday product ranges, particularly round cakes, buns and rolls rose.

It has since recovered, trading at 39% of the previous year’s levels in the fourth quarter.

In March, the company temporarily closed foodservice buns and rolls business Kara because of reduced demand. The site reopened last month and shift numbers have continued to increase since.

Finsbury saw major changes in shopping behaviour in retail. Although celebration cake sales declined, demand for some everyday product ranges, particularly round cakes, buns and rolls rose.

Initially, some complex products could not be manufactured until social distancing measures were introduced at the company’s bakeries, and some products were delisted as stores prioritised store-cupboard essentials. Since then, Finsbury has gradually reinstated full product ranges.

The business said it had brought back many of its previously furloughed staff and would continue to do so.

At the start of the crisis, Finsbury froze all discretionary expenditure and capital investment and suspended its interim dividend, while the senior staff agreed to a three-month salary reduction.

While the pandemic meant that sales were down in Q4, we are encouraged by the steady monthly improvements we have seen since March

Finsbury Food Group CEO John Duffy

Looking ahead, the company said it expected changing consumer behaviours that had accelerated during lockdown – such as online grocery shopping, home-delivered eat-in, and home working – to continue

“While the pandemic meant that sales were down in Q4, we are encouraged by the steady monthly improvements we have seen since March as demand begins to move in the right direction again,” said Finsbury CEO John Duffy.

He added that the business continued to operate in an uncertain situation, but was well-positioned by working collaboratively with large customers and brand partners. This would enable it to anticipate and respond to future demand patterns and develop products and ranges that fulfilled shifting consumer needs, he said.

“The benefits of the group’s geographical, channel, customer and product diversification have been evident throughout the crisis, and we have illustrated that we are robust, but agile – we have adapted quickly so far and will continue to do so.”