Park Cakes has suffered a pre-tax loss of £3.6m, despite hitting a record turnover of £121.2m, as revealed in its latest financial results.
The bakery manufacturing firm, which produces cakes for the retail sector, has filed its directors’ report and financial statements with Companies House for the 53-week period to 31 March 2012.
It revealed an operating loss of £700,000, in comparison to 2011 in which Park Cakes reported a profit of £1.2m. This included exceptional costs of £500,000 and an amortisation credit of £1.7m on negative goodwill.
The directors’ report said: “The UK cake market grew by 3% last year. Company turnover outperformed the market growing to another record high of £121.2m, up 11% versus the previous year. This was again driven by all year round increases in core categories, particularly in hot eating desserts.”
The company attributed its significant sales growth to new product development, meeting customers’ target margins and reacting quickly to additional demand created by successful promotional activity.
Looking at the trading environment, Park Cakes’ directors said the strength of its supermarket and food retailer customers, combined with competitive pressure in the industry, represent continuing risks which could result in lost sales to key competitors.
It added that sales with supermarkets and consumer demand are inherently uncertain and a fall in demand may result in the company requiring additional funding.