Finsbury Food Group says it will deliver profits in line with expectations despite “unprecedented commodity and labour inflation”.

The business reported a 2.4% increase in like-for-like sales to £290.2m, although total revenue, including the two bakeries closed last year, fell 3.4% to £303.6m.

In October the business announced it was shutting Brent-based Grain D’Or, which supplied own-label products including pastries, muffins and speciality breads, and Campbell’s Cakes in Twechar, Scotland.

Reporting today in a trading update for its financial year ended 30 June 2018 ahead of entering its close period, Finsbury also said turnover at its overseas division declined 0.7%.

The company stated that a combination of operational efficiency and price recovery had enabled it to recover cost increases in a “very challenging environment with unprecedented commodity and labour inflation”.

It added that, looking ahead, although the current UK economic environment remains challenging the board believes the group is well positioned to maintain its market position and to continue to invest in innovation and efficiency.

"We are pleased with the resilient performance of the group in what has once again been a period of market-wide inflationary pressure, illustrating that the work and investment undertaken in prior periods has continued to bear fruit,” said Finsbury CEO John Duffy.

“The group is robust, well diversified and in a strong position to continue to deliver on its strategic objectives in the period ahead."