Warburtons’ offsets difficulties to secure growth

Warburtons’ boss Jonathan Warburton said the positive results came despite difficult trading conditions, which resulted in an 8.5% increase in raw material costs because of the rising price of wheat.

“The main focus of the business remains on growing the share of the bakery market in Great Britain, ​he said in his directors’ report filed with Companies House. “It is recognised that this can only be achieved by developing new product ranges alongside our current market leading lines.​

‘Progress well’​

“Sales of wraps, sandwich thins and gluten-free products have all continued to progress well in the period, as a result of on-going investment in plant capability.”​

Earlier this year, the family-owned firm invested £20M in a new bakery​ dedicated to its sandwich alternatives lines at its site in Burnley, Lancashire.

The Bolton-based business will continue to develop its brand to offset volatility in the sector, Warburton added.

“We are exposed to commodity markets, principally wheat and energy,”​ he claimed. “The level of volatility remains significant within these cost areas and with the consumer environment remaining challenging cost recovery is difficult.”​

An uncertain economic climate, changing consumer trends and an increasingly competitive market has also impacted the business, it said.

Increase in operating profit​

The firm drove a 52% increase in operating profit before exceptional items to £34.56M, in the 52 weeks to September 28 2013. Turnover was up by 7.3% to £562.1M over the past year.

Profit before tax of £36.3M was lower than the before tax of the previous period of £75.9M. No dividends were received, paid or proposed in the period. Whereas, in the previous period, a dividend of £55M was received from a subsidiary and the company paid dividends totalling £55M to the parent company.

At the end of the period, the business held cash of £28.3M compared with £1.3M in the previous year.

Employee numbers were also down on the previous period, from 4,546 to 4,534 – despite the firm claiming its Burnley factory would create 60 new roles.

Meanwhile, Warburton told FoodManufacture.co.uk in an exclusive podcast that innovation was “vital”​​ in a retail market increasingly dominated by discounted retailers.