The average sales increase for the top 105 bakery companies was 18.9%, for the three years to December 7, 2006, according to a recently published report from Key Note.

"The sales growth rate shows an upward trend," said the report, "although the growth rate appeared to be slowing towards the end of the period." Price rises started to hit hard in 2007.

Pre-tax profits also increased, improving on average from £3.1 million in 2004 to £3.5m in 2006. In contrast, however, the pre-tax profit margin deteriorated from 8.1% in 2003/04 to 7.7% in 2005/06. Liquidity also deteriorated over the analysis period.

Businesses analysed in the report include Greggs, Warburtons, Maple Leaf, Finsbury Food, Krispy Kreme UK, BakeMark UK and Patak’s.

Out of the top 105 companies, each had an average of 842 employees, with pay increases of 11.5%, up from £13,255 in 2004 to £14,779 in 2006. Sales per employee improved from £50,000 in the first year of analysis to £55,000 in 2005/06.

"Over the same period, capital employed per employee - the amount of funds available to assist each employee in their role - decreased from £23,000 in 2004 to £22,000 in 2006," according to the Business Ratio Report.

It added that the average return on capital, a measure of the profits generated against the level of capital invested in a company, increased from 17.4% in 2004 to 24.6% in 2005, before falling to stand at 19.3% in 2006.

Commenting on the efficiency of the companies in question, the report noted: "In the third year of analysis the average company generated £1.67 in sales for every £1 of total assets held."

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