Coronavirus eats into Finsbury Food revenue as sales sink during lockdown
Cake manufacturer Finsbury Food Group said it expects annual sales to dip slightly in 2020 as a plunge in sales during the second half of the year during the coronavirus crisis diluted progress made last year.
The bakery group said second half sales slumped as a result of the national lockdown, with sales sinking 24 per cent in April compared to the same period last year, before recovering slightly in June.
Shares rose 1.7 per cent to 68p on the news at 10.30am.
The results
Group revenue slipped 2.9 per cent to £306.3m in the year ended 27 June, from £315.3m last year.
Revenue sank 9.8 per cent to £146.9m in the second half of the year, after a strong first half performance, which saw revenue climb 4.7 per cent to £159.4m.
Turnover at the group’s core division UK Bakey dipped 2.6 per cent year-on-year.
Overseas sales dropped 4.9 per cent during the year.
Why it’s interesting
Finsbury’s second half sales were a combination of “good momentum and strong trading“ in January and February, followed by “significantly weaker trading at the outbreak of the pandemic” and “depressed but progressively improving sales” in the last few months, the company said.
The Prime Minister’s announcement of a nationwide lockdown in March annihilated demand in Finsbury’s foodservice and food to go units, which accounted for around 20 per cent of group sales last year. Finsbury said its food to go sales plunged to nil overnight, and only recovered 39 per cent of trading levels seen in the same period last year.
Social distancing rules also bit into group trading, with demand for celebration sales sinking during the pandemic as families and friends were prohibited from gathering in large groups.
Finsbury said it will prioritise store cupboard essentials in the next quarter, after seeing a spike in demand for everyday product ranges including buns and rolls.
The group said it expects many of the changing consumer behaviours witnessed during the pandemic will endure, and Finsbury will look to adapt to an acceleration in online grocery shopping, home-delivered eat-in, and an increase in home working.
However, it added that “demand patterns in the months ahead remain uncertain, particularly in the foodservice channel and the ongoing Brexit uncertainty”.
Finsbury said: “We therefore remain unable to provide market guidance at this time.”
The group said it will bring furloughed staff back on a demand-led basis, with many having now returned to work as trading picks up again.
What Finsbury said
John Duffy, chief executive of Finsbury Food Group, said:
“It has been a challenging period for the group but we have remained cash generative. By implementing comprehensive cost and cash management measures quickly and effectively we will emerge from the crisis with new and more efficient ways of working that will be of long-term benefit.
“We continue to operate against a backdrop of heightened uncertainty and likely will for some time, but the group remains well-positioned to withstand the current situation, working collaboratively with large customers and global brand partners alike to ensure we anticipate and respond to future demand patterns and proactively develop products and ranges that fulfil those shifting consumer needs.
“These have been incredibly testing times for our colleagues and their families. On behalf of the board I would like to take this opportunity to again extend our profound thanks to them all for their hard work, passion and commitment.”