Icing off the cake: Finsbury Food drops as butter prices skyrocket

AIM-listed cake maker Finsbury Food dropped sharply this morning despite growing like-for-like sales 0.5 per cent in the last six months.

Shares in the Thorntons supplier fell nearly 12 per cent an hour after markets opened this morning, trading at 82p.

Read more: Cake maker Finsbury Foods sees profits slip after bakery closure

The drop came after the group said it had grown like-for-like revenue to £146m, but overall sales fell 3.5 per cent to £152m.

The bakery’s top line took a hit after it closed the Grain d’Or site in Harlesden, citing a tripling in the price of butter, a key ingredient in its cakes.

It overseas division, which operates mainly in France and Ireland, lost as much as eight per cent of its sales, which made up around 12 per cent of overall revenue last year.

But at home sales grew 1.7 per cent, “despite a difficult macro environment with sustained inflationary pressure […] which illustrates the importance of the group’s strategic diversification and ongoing investment programme,” Finsbury said.

The company has increasingly moved to cater to alternative diets. In September it bought family bakery Ultrapharm, which specialises in gluten-free baked goods.

The company also recently launched Wiso, its own free-from brand to tap into European demand for gluten-free produce.

Read more: Mary Berry to launch new cakes with Finsbury Food Group

Around 650,000 people in the UK are estimated to have coeliac disease, an allergy to gluten, while many more follow a no or low-gluten diet, according to the charity Coeliac UK.

Finsbury Food will present its interim first half results on 25 February.