Profits at bakery giant Warburtons have been hit by commodity inflation and higher costs relating to driver shortages, the company’s latest accounts reveal.
The UK’s largest bread brand reported revenue of £605.7m for the 52 weeks ended 24 September 2022 – an increase of 6.7% on the comparable 2021 period.
However, it’s operating profit fell by 43% from £22.4m to £12.8m during that time – a decrease of 43% – owing to elevated costs.
“The unfortunate events which led to the war in Ukraine have had a significant impact on the business throughout the second half of the financial year,” it said in annual accounts on Companies House. “Global markets and commodity prices were impacted significantly and as a result the company saw inflationary increases in costs across key areas including wheat, energy, and fuel.
“The company also experienced a step up in costs, together with higher costs to secure service to customers during the period of driver shortages.”
On a positive note, Warburtons said volumes remained strong across the year driven by strategic customer partnerships and new product introductions. The wrapped bakery market remains very competitive, it noted, highlighting long-term declines in the core bread market although these are being offset by growth in other baked goods.
NPD rolled out during the period included additions to its gluten-free range in the form of a Seeded Bloomer and Super Soft Seeded Sliced Rolls, as well as a range of sliced loaves under the branding Seeds & Grains.
Crumpet Thins, seeded thin bagels, and gluten-free Cinnamon & Raisin Sliced Fruity Buns are among the new products unveiled in the latest period.
“The company continues to focus on quality of product and service supported by the ongoing development of new product ranges,” it added. “Investment is focused on enhancing our capability to changing consumer trends and deliver productivity. The continuing innovation and investment in new capability will ensure we are well placed for future progress.”
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