Warburtons’ operating profit fell by more than a third last year as the business was hit by rising costs and a decline in the bread market.

Reporting a 0.3% drop in overall sales to £524.7m in the year ended 31 September 2017, Warburtons said revenues had largely been held up by growth in its non-bread lines, which include crumpets, bagels and teacakes.

The business struggled to recover rising input costs over the period, and said these would be carefully considered in future while ensuring the company minimised impact on customers and consumers.

Operating profit fell 36.7% to £22.4m, while profit before tax fell 40% to £34.6m.

Warburtons said the financial results were in line with its expectations, and that the board viewed them as “satisfactory in the current economic environment”.

“In the period under review, profit has declined. Revenues have been held largely due to growth in non-bread products as we continue to innovate and develop new product ranges,” said Warburtons chairman Jonathan Warburton.

“The wrapped bakery market remains very competitive, with the continuing decline in the core market compounded this year by increased input costs.

“The profit for the period has been achieved only through the continued focus on the quality of product and service supported by the continued development of new product ranges. This continuing innovation and investment in new capability will ensure we are well placed for future progress.”

Recent innovation by the business has included the trial of new artisan loaves (pictured above) that are hand-crafted and ‘based on a traditional artisan process, with simple ingredients and Warburtons signature sourdough’.