Finsbury Food Group has secured the licence to produce a range of Mary Berry cakes.

The business is to launch nine products – including round cakes, loaf cakes and celebration cakes – into supermarkets in the second half of this year.

News of the deal came as Finsbury announced its interim financial results for the 26 weeks ended 31 December 2016.

The company reported that revenue had been flat at £156.6m, with operating profit rising 4% year on year to £8.3m.

Finsbury said the UK grocery market continued to be “challenging”, although it felt the wider economic environment was improving slowly.

It stated that price rises were inevitable in light of cost inflation brought about by increasing commodity costs, the adverse impact of US dollar and euro exchange rates and the National Living Wage.

“The group is working hard to mitigate input cost inflation through continued operational efficiency, investment in automation and, inevitably, price increases; all of which are ongoing,” it reported, adding: “Whilst we are cognisant of the price recovery process, we expect the group’s steady performance to continue into the second half of the financial year.”

Bakery division

Revenue from Finsbury’s bakery division fell 2.9% year on year to £139m, with operating profit up 2.2% to £7.4m.

Finsbury said its own business had followed the general decline in the grocery cake market, where volumes had fallen 4.8% on value sales down 1.5% (IRI 26 w/e 31 December 2016).

“Celebration cake continues to perform, but round cake has seen decline on the back of lower promotional activity, a common response to higher input prices,” the company stated.

“In bread, our focus is on more niche style bakery products as opposed to traditional bread and therefore revenue exceeds market performance.”

Finsbury added that six of its eight manufacturing sites were now supplying into the foodservice channel and were providing a broad speciality bakery range, from artisan and free-from breads to snacking and sharing cakes.

The company said it would continue to invest in automation and operational improvements to increase product capabilities and maintain margins.

Overseas division

Revenue from Finsbury’s overseas arm, which comprises the Lightbody Europe business that trades primarily in France, benefited from being heavily exposed to the euro. This had contributed to a 31.7% hike in revenue to £17.6m, with operating profit up 26% to £1m.

Commenting on the results, Finsbury chief executive John Duffy said: “We have delivered a strong first-half performance and this demonstrates the benefits of the group’s investment and strategy implemented over prior years and reinforces our approach to innovation and diversification across our channels, customers and products.

“Well-documented market challenges persist. However, the group has prepared well and is continuing to work hard to mitigate against these. Furthermore, the group’s track record of exceptional growth and diversification over the prior years illustrates that it has the right strategy in place to continue to deliver growth and improved shareholder value over the coming years.”

Hain Daniels last year launched a range of Mary Berry chilled desserts produced under licence, including Belgian Chocolate Brownie and Luxury Summer Fruit Pudding.