Warburton’s makes less dough after bakery shake up
AN ONGOING restructuring of Warburtons’ bakery operations contributed to a 37% drop in profits to £16.3m in 2011 (2010: £23m profit).
Turnover remained largely flat in the year to September 24 at £495m (£492m) during a period which the company described as “very competitive”. Trading conditions also worsened throughout the year as overall sales in the bakery market fell in both value and volume terms.
As a result, Warburtons’ board described its performance as “satisfactory”.
Chairman and chief executive Jonathan Warburton said: “Over the last twelve months we have further cemented our position as not only Britain’s favourite baker, but as the largest British grocery brand in the UK.
“By focusing on meeting consumer needs and providing the best quality products and services we have been able to maintain differentiation in an increasingly competitive landscape,” he said.
The lower profits were due partly to exceptional charges relating to an ongoing shake-up of its bakery operations. The firm has invested in a number of higher-capacity, more efficient sites in recent years which can serve larger areas.
This has meant some of its smaller sites have closed, such as a bakery in Newport that was shut last year and the Pennine bakery in Shaw that closed in January. The latter is expected to cost the firm over £2.8m in redundancy payments.
By the year end, the firm’s net assets increased to £471.5m (£436.6m), largely due to lower debts as it paid back £20m from long-term borrowings, which fell below £100m.
Mr Warburton, who is part of the fifth generation of family members running the business, said the company was “committed to growing our share of the market in the UK”.
“To support this ambition, have invested in a number of projects, including our Export, Snacks and Free From businesses, which we anticipate will contribute positively in the future.
“Our success is testament to our continuous innovation, the hard work of all our employees, and our commitment to always produce the best quality products on the market,” he added.
