Finsbury Food group, a cake maker, took a £12m hit after shutting down a bakery in West London that was losing money. It saw a decline in the profits of the company.
The AIM-listed firm closed the doors of its Grain d’Or bread bakery that is located in Harlesden after the price of butter tripled, Butter makes up 30 percent of the ingredients in the products of the bakery.
Today, the firm gave an update regarding emergency planning, as John Duffy, its chief executive, said that he was looking for suppliers of butter and eggs that are based in the United Kingdom in anticipation of slowdowns in terms of delivery time after Brexit.
The firm said that it had “delivered a resilient performance in an unprecedented inflationary environment.”
Finsbury Food group disclosed that Brexit presented possible effects which included “higher commodity prices for items sourced from Europe, tariffs, associated administrations costs, access and affordability of labour, and exchange rate volatility.”
The company currently imports a large number of ingredients that are coming from Europe, particularly the Netherlands. Its products include cake slices, large cakes, bread, and pastries.
Finsbury is one of the largest supermarket cake sellers in the United Kingdom. It saw its pretax profits decline by 65.7 percent, to £4.5 million, which the company attributed to the closure of Grain d’Or. However, its comparable sales increased, however, rising by 2.4 percent to £290.2 million because of the high demands for a Mary Berry cakes range, and the products that are based around Paw Patrol and Batman.
Since the end of its reporting year last June, the firm has acquired Ultrapharm, a gluten-free baker. The said acquisition gave it access to a new sector, as well as manufacturing facilities that are located in Zywiec in Poland and Pontypool in Wales.
CEO Duffy stated: “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.”