More dough for Warburtons after sales hike

FAMILY-owned bakery giant Warburtons managed to double profits to £32m last year following a 15% rise in sales to £510m, according to newly-filed accounts.

The company, which announced 121 job cuts in January as part of a move that will see it build a new £25m bakery at its Bolton headquarters, described its operating performance as “solid”, despite a difficult trading environment.

A directors’ report accompanying the accounts to Warburtons Holdings prepared by chairman Jonathan Warburton said that in the second half of the year to September 26 it faced “unprecedented increases in commodity costs”, adding that the volatility of commodities such as wheat was an issue that required constant management focus.

However, raw materials and energy costs as a proportion of turnover fell to 31% – down from 37% in its previous financial period.

“The Warburton’s business has continued to focus on the quality of product and service while recognising the need for an increased level of commercial support for our consumers within a very competitive market place,” he said.

Accounts also show that the collapse of Sale-based Lyndale Group – in which the firm had a 20% stake – has cost Warburtons more than £3m to date on properties which Lyndale leased but Warburtons acted as guarantor.

The firm generated cash of £88m during the year – half of which was used to pay down debt.

By its year end, net debt had fallen by £46m to £116m. The company finished the year with net assets of £478m (2008: £471m). The average number of employees grew by 86 to 4,921.

In a statement to TheBusinessDesk.com the company said: “Warburtons financial results for 2009 are in line with expectations and the board views the outcome as satisfactory in a  challenging economic environment.

“The business remains focused on growing its share of the bakery market in Great Britain and has further developed the national footprint of the business, particularly through the opening of Bristol bakery.”

Managing director Robert Higginson added: “As Britain’s second largest  grocery brand, we remain totally focused on the key driver of our growth,  which is an uncompromising commitment to providing consumers with locally  baked, great tasting quality products everyday.

“We have one of the best invested food  manufacturers in the country and our business is well placed to support growth going forward.”