Finsbury Food Group (FFG) has warned investors that rising commodity costs and consumer caution could affect its growth rate over the next 12 months.
In a trading update, released ahead of its closed period, the company said while it expects earnings to grow over the next year, it is "likely to be slower than the growth achieved recently due to inflationary pressures and the uncertainty in the spending patterns of consumers".
FFG said it had successfully passed commodity cost increases to customers over the past year, but its margins for the year to June 2008 were reduced by more than £1.5m, due to the speed of increase and "a natural time-lag in achieving selling price increases". The company said it had compensated by strictly controlling overheads.
Sales for the year to June had been strong, Finsbury said, with "excellent growth in all subsidiaries". Lightbody Cakes’ sales were up 11% year-on-year, Memory Lane Cakes’ sales increased by 11% and California and Campbell Cakes combined were up 14%.
Its Nicholas & Harris division saw an increase of 19% and, comparing the second half of the year to the first half, average weekly sales from United Central Bakeries have risen by 17%.
Chief executive Dave Brooks said: "Our sales growth prospects remain very positive over the coming year, with major range relaunches either in progress or planned with all of our major customers.
"The next 12 to 18 months will see a tough trading environment, though such conditions also contain significant oppor-tunities for the best businesses to seek out and thrive. Our goal is to ensure we are one of those businesses."
=== In Short ===
== General Mills’ growth ==
US company General Mills has announced its results for the year to 25 May, revealing net sales growth of 10% to $13.7 billion. Its Bakeries & Foodservice division saw a net sales increase of 11% over the financial year, and a 23% rise in the fourth quarter. Net sales in its snack division, including products such as Nature Valley granola bars, grew 12% in 2008.
== Afghan bakers move ==
Bakers from Afghanistan are setting up their trade in the United Arab Emirates. The bakers, most of which come from the market town of Ghazni, have been attracted to the UAE by better job opportunities.
== Flower expansion ==
Flower Foods, a producer of packaged bakery products in America, has announced it will acquire Florida’s ButterKrust Bakery, subject to regulatory approval. Flower is to purchase all of the issued and outstanding capital stock of the holding company of ButterKrust, which sells fresh bread and rolls throughout Florida.
== Lebanese bread rise ==
The bakeries association in Lebanon has announced it will increase the price of bread by a third, with immediate effect. The price hike comes in response to the rising cost of fuel and flour. However, the move has been condemned by the Economy Ministry, which has said the prices rises are ’unjustified’.
== Almondy acquisition ==
Smedvig Capital has sold its 75% stake in tart maker Almondy to Swedish buyout firm Segulah. Smedvig took a minority stake in the company in 1994 and has made a tenfold return on its initial investment.