Warburtons makes less dough as profits dip 15%

PROFITS dipped 15% last year at family-owned bakery business Warburtons, it emerged today.

In what was described by the Bolton-based company as a “difficult economic environment” it said it had had to offer “an increased level of commercial support through promotions and pricing” to maintain market share.

Sales in the year to September 25 2010 fell 5% to £492m from £510.4m as profits, which were also hit by a number of one-off items, came in at £28.8m compared with £33.9m the year before.

The business was hit by a fire at its Bolton bakery, last July which cost more than £2m. Insurance claims related to the fire are ongoing the company said.

It also made a £7m provision in the accounts related to the closure of a bakery in Newport,  which was announced last September.

Warburtons, one of the leading UK grocery brands, employs more than 4,800 people nationwide.

In a statement to TheBusinessDesk.com Warburtons said the results for 2010 has been “in line with expectations”.

“The board views the outcome as satisfactory in an increasingly challenging economic environment, ” it added.

Managing director Robert Higginson,added;  “We continue to focus on the quality of product and service in order to maintain differentiation in an increasingly competitive landscape.

“The continued difficult economic environment in 2009/10 saw us increase our level of commercial support in order to maintain our market leading position.”

Mr Higginson said the current year was continuing to be tough for the baking industry and also for consumers.

“While we remain focused on growing our share of the UK market our primary concern is ensuring we continue to provide our consumers with value for money wherever possible which is not just about price but about quality and choice of products.

“To  support  this  we  have  invested  in  some  innovative new products, Squareish Wraps and Thins,  and have also entered into the snacks market with our Baked Pitta Chips. These new products have been very well received and we  anticipate  will  contribute  positively to our business in the future.”

Despite the fall in profits during the year, three members of the Warburton family. chairman Jonathan and directors Ross and Brett shared dividends of £8.2m.