Bakery specialist Finsbury Food Group plc (LON:FIF) served up flat first half revenue and warned of persistant market challenges as it prepared to launch cakes with British food presenter Mary Berry.
Revenue in the six months ended 31 December was unchanged at £156.6mln, as a slump in UK sales offset growth in its overseas business.
The UK bakery arm, which supplies cakes and bread to grocery and food service channels, weighed on revenue with sales down 2.9% to £139mln. The decline reflected a 4.8% fall in grocery cake volumes.
The overseas business, which imports premium UK food products, reported a 31.7% jump in revenue.
UK bakery operating profit, however, rose 2.2% to £7.4mln while overseas operating profit increased 26% to £1.0mln, supported by higher margins in both divisions.
Pre-tax profit rose 5.3% to £8.3mln as the company implemented cost control measures.
The interim dividend was lifted 7.5% to 1.0p, which Finsbury said was in line with the trading performance.
Turning to the second half, the group plans to launch a range of cakes through its license with Mary Berry, the former star The Great British Bake Off.
Chief executive John Duffy said he believes the investments made in the first half to broaden its channel and diversify products have created a solid platform for the business to grow.
However, he warned of a number of risks and uncertainties that could have a material impact on the financial position of the group. The company has to contend with increasing labour costs as a result of the National Living Wage regulation and higher import costs on the back of a weaker post-Brexit pound.
"Well documented market challenges persist, however the group has prepared well and is continuing to work hard to mitigate against these,” Duffy said.
“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."
Shares fell 1.68% to 111.10p in morning trading.