Finsbury Food Group PLC (LON:FIF) has reported a slump in annual profits after it the cake and bread maker took the decision to close its loss-making Grain D’Or bakery business.
With butter prices having more than tripled over the past few years, Finsbury said Grain D’Or had become uncompetitive and, with losses widening, it had little choice but to shut the division down.
Costs associated with closing
Costs associated with the closure totalled more than £12mln, leading pre-tax profits to fall by two-thirds to £4.5mln (2017: £16.6mln). Stripping out the one-offs, adjusted profits rose by 4% to £17.2mln.
That was on revenue of £303.6mln (2017: £314.3mln) – down 3.4% in real terms but a 2.4% rise on a like-for-like basis.
Still, the dividend got a 10% boost to 3.3p a share and chief executive John Duffy said the performance had been resilient in the face of market-wide headwinds.
“Our performance over the period has further illustrated the group's resilience and our ability to deliver against our strategic priorities, ultimately allowing us to grow like for like sales and profit year on year, reduce our debt further after significant investment, and continue to grow the dividend,” he said.
“The ongoing capital investment programme and relentless efficiency focus of recent years have enabled us to not only cope with this challenging market environment but also maintain our margin.”
Shares dipped 0.3% to 123.6p in early deals on Monday.