Pirates help food firm Finsbury sail into profit

The group, which employs more than 1,000 people at its Lightbody plant in Hamilton, said it was focused on making its products more affordable despite rising input costs. It expects high prices for ingredients such as butter, sugar and wheat to persist for some time.

Results yesterday showed sales in the year to 2 July had risen by 12.6 per cent to £189.6 million, against the previous 12 months. Underlying profits were up by 8.3 per cent to £5.8m but no dividend payout was declared.

The baker – the UK’s second largest supermarket cake supplier and which also makes sweet treats for Thorntons and low-fat cakes for the WeightWatchers brand – said shoppers continued to have a taste for its products despite the downturn.

Thorntons-branded sales jumped by 17 per cent and Disney by 16 per cent following heavy promotional activity and the success of Disney movies such as Pirates of the Caribbean: On Stranger Tides and Cars 2, while WeightWatchers products also gained market share.

The firm’s Scottish factory specialises in the production of celebration cakes, including for Thorntons and Disney.

Its “Memory Lane Cake” division employs about 900 people at Cardiff, working on own-label cakes for retailers, as well as Thorntons. A boost from promotions drove a double-digit sales rise at the plant, though margins were affected by higher input prices.

Group chief executive John Duffy said that “keeping things affordable for the customer was essential”, adding that where possible the company would modify its product range to offset price increases.

“We are pleased to have returned to organic growth, an important milestone for the group,” he told investors.

“We are emerging from a complex and exhaustive programme of reorganisation and – despite the macro-economic factors continuing to buffet the business and our customers – our structured approach has clearly started to bear fruit.”

Over the year, sales rose by 12 per cent at the group’s core cakes business to £139.6m. Its bread arm, which includes speciality supplier Vogels and a range of gluten-free products under the Genius brand, recorded a 14.2 per cent gain to about £50m.

Bottom-line profits for the group rose by 22 per cent to £5.9m. Total net debt was cut by just over 10 per cent to £32.7m.

The firm’s non-executive chairman, Martin Lightbody, said: “Tough times demand a resilient mindset. Toughness combined with appetite for the challenge, commitment to hard work and uncompromising dedication to the task.

“All these qualities, and a good deal more, have been widely in evidence at Finsbury Food Group over the past year. Together, the combination has generated a trading performance that provides quiet cause for satisfaction and real grounds for encouragement going forward.”

Lightbody oversaw the reverse takeover of his family’s bakery business by Aim-quoted Finsbury in 2007.

He served as chief executive until Duffy’s appointment in September 2009.