Finsbury Food Group has reported strong sales of bread in retail stores but has suspended production at its foodservice operation.
The foodservice market, which accounts for about 20% of Finsbury’s business, has been virtually shutdown by the coronavirus and the government’s instructions to close pubs, restaurants and schools.
As a result, Finsbury has temporarily suspended production at its Kara site in Manchester, which serves the foodservice channel. It is continuing to supply customers from its existing stock.
The business said it was also reviewing shift patterns and production elsewhere, depending on sales. It is freezing all discretionary expenditure and capital investment and carefully managing cash resources.
But the retail side of the business was proving resilient, reported the company, with bread overtrading although some parts of the cake market had been weak.
Finsbury reported that trading in the first two months of the second half of the financial year had been tracking in line with market expectations.
“We are in the very early stages of understanding the impact of the virus on our business and, with the situation being as fluid as it is, it is not currently possible to provide guidance on future earnings,” stated the company.
“As a manufacturer of a wide range of baked goods, we are committed to playing our part in ensuring the UK’s supermarkets have the food stocks needed at this time of unprecedented demand. The health and safety of our employees is our top priority, and we continue to adhere to the UK government’s rules and guidelines, with extensive procedures in place across our sites.”
CEO John Duffy said that, despite the difficulty in predicting short-term performance because of Covid-19, he was encouraged by the demand on the retail side of the business.
“While the coming weeks and months are likely to be some of the more turbulent we’ve seen, the fundamentals of the business remain sound and we see no reason to believe the virus will damage the longer-term value proposition of the business,” he added.
“Our employees across the group have thus far risen superbly to the challenge, and I would like to take this opportunity to thank them all for their continued hard work and dedication at what is an extremely difficult time, and to reassure them that their well-being continues to be our priority.”