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Finsbury Food to close Grain D'Or factory

06 October 2017 07:09

Finsbury Food Group - a leading speciality bakery manufacturer of cake, bread and morning goods for both the retail and foodservice channels - has decided to close Grain D'Or factory.

It said that the closure, which was anticipated to be completed by 2 Dec, meant the company would benefit from not supporting the losses associated with the factory.

It said this fitted with its strategy of focusing investment behind profitable product niches to drive long term market growth and value within speciality bakery.

It said: 'Grain D'Or has been historically loss making and for the 12 months ended 30 June 2017 it reported an operating loss of £3.33 million on revenues of £28.5 million.

'Due to the products it produces, Grain D'Or trades in a particularly competitive environment which creates strong competition for contracts and loss-leading pricing.

'With this in mind, and together with the cost issues being experienced across the industry, Grain D'Or has lost two large contracts since the year end, impacting its financial performance further.

'The company believes the exceptional cash costs associated with the closure of Grain D'Or could reach up to £10 million, spread over a period of up to seven years, but expects it more likely to be in the region of £6 million.

'The Company will benefit from the cancellation of planned capital investment programmes in Grain D'Or, which were significant.'

Story provided by StockMarketWire.com

Related Company: FIF

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