Baker Roberts sees profits dented

ANNUAL profits at North West independent bakery Frank Roberts & Sons slumped 36% to £4.4m as it was hit by a number of one-off costs after buying two businesses in 2010.

The long-standing Northwich-based company said its core business had also come under pressure in the 12 months to August 27 last year, due to commodity price inflation whichb raised production costs, and aggressive price cuts and discounting by its retail customers, which squeezed margins.

In 2010 Frank Robers and Sons made its first acquisition in its 120-year history as it bought  Derbyshire bakery Aldreds from administration. Three months later it rescued a second troubled firm, P & A Davies of Hawarden.

One off restructuring costs of £800.000 and trading losses of £600,000 relating to the acquisitions and increased pension costs of £500,000 all dented the bottom line.

Among the measures taken including focusing the Davies business solely on the gluten-free market – a segment seeing strong growth.

The acquisitions helped Roberts grow sales by 13% to £79.1m and headcount by 6% from 847 to 898.

Managing director Mike Braddock said in his review: “Like-for-like operating profit in the group’s core business was marginally down in comparison to prior year despite a severely challenging environment of significant commodity price inflation togther with the ongoing recession in the UK which resulted in intense price pressure and promotional activity in our market.”

A dividend of £1.1m was paid during the year, unchanged on 2010. Excluding its pension scheme deficit, net assets grew from £27.6m to £29.5m.