FDBusiness.com

Despite a declining turnover as customers moved away from the premium products that had been its traditional area of strength, Finsbury Food Group managed to deliver growth in key areas, increase profitability and restructure the business to achieve operational efficiencies during the year ended July 3rd 2010. Revenue at the UK cakes, bread and morning goods manufacturer declined by 5.9% year on year to £168.3 million. Gross margin for the financial year was 28.0% representing an increase of 0.8% year on year, reflecting production improvement initiatives and a decision to exit specific low margin business.

EBITDA was £10.97m and pre-tax profit before tax was £5.39m, both slightly ahead of the previous year. Capital investment to support growth amounted to £3.5m including £2.0m in a new ‘free from’ production facility. Total net bank debt was reduced by 11% to £36.5m at year end within established banking facilities of £50.2m.

“We have responded to a difficult trading climate by adapting our range of products, developing strategies to meet the modified purchasing habits of our customers while stepping up the pace of internal change,” comments John Duffy, chief executive of Finsbury Food Group. ”Success for this business depends on trading through the present period, paying off a proportion of our debt, remaining within financial covenants, building a financial position that is less leveraged and returning to growth in an expanding marketplace.”