Finsbury Food Group plc Pre Close Statement

Finsbury Food Group plc Pre Close Statement

Finsbury Food Group plc, a leading manufacturer of cake, bread and gluten free bakery goods, is today providing an update on trading for the first half of the current financial year, ended 31 December 2011, prior to entering into its close period.

Total Group sales revenues continued to grow significantly reaching £102m, passing the £100m in six months milestone for the first time. This represents organic growth of just over £14m and an increase of 16% compared with the prior year.

The Group experienced growth across each of the Finsbury businesses. Both the UK Cake and Bread and Free From businesses saw strong growth of 10% and 8% respectively.  The combination of these businesses accounted for just over half the total Group growth. Lightbody Europe, the Group's 50% owned joint venture export business, provided the balance with growth of 167%. As communicated previously, the second half and consequently full year growth rates will not be as high as the first half as the Group has now reached the anniversary of last year's new product launches, European contract gains and increased promotional activity levels.

The trading environment remains very tough, with the challenges of a financially squeezed shopper, and stubbornly high commodity and input price inflation. That said, Finsbury is continuing to invest in each of the businesses to further improve operating efficiencies, and drive growth through innovation to mitigate against these headwinds. The high first half growth, delivered through both volume and price rises, complemented the Group's efficiency initiatives to largely offset year on year commodity inflation, although the operating margin percentage was slightly lower than prior year as a consequence.

Despite these difficult consumer and inflationary conditions, the Group continues to see growth opportunities within its businesses and, after the first half, is trading in line with expectations.

John Duffy, Chief Executive commented: "The Group has reached an important milestone, with over £100m sales in the first half.  This demonstrates our resilience and more importantly the quality and appeal of our product ranges with consumers

"Commodity inflation remains very high year on year and this continues to depress our already low operating margins. It is hard to forecast any improvement in this in the short term, however management and staff are committed to deliver on our twin strategy of growth and continued efficiency investment to ensure our continued success in this difficult market place."

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