Finsbury Food Group, the UK bakery-products supplier, today (27 March) warned the coronavirus outbreak meant it could not provide investors with guidance on the company’s earnings.
Publicly-listed Finsbury said its operations supplying the UK foodservice channel, which generated 20% of the company’s revenue in its last fiscal year, had “seen a significant reduction in demand” after the Government’s orders to close schools and non-essential shops.
The company has temporarily suspended production at a site in Manchester that supplies foodservice customers, still selling through existing stock. Shift patterns and production elsewhere remain under review “as sales dictate”, the company said.
Finsbury has put on hold “all discretionary expenditure and capital investment” and withdrawn its proposed interim dividend.
On a more positive note, the company said its business supplying the retail market is “proving resilient with over-trade in bread”. albeit “pockets of weakness in cake”.
It added: “Trading in our foodservice business is likely to continue to be significantly impacted in the immediate term as a consequence of the closures. We are in the very early stages of understanding the impact of the virus on our business and, with the situation being as fluid as it is, it is not currently possible to provide guidance on future earnings.
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By GlobalData“While the virus will continue to have an impact on normal trading patterns in the near term, the fundamentals of the business remain sound and the board is confident in the group’s ability to withstand the current situation and deliver on its long-term growth ambitions.”
John Duffy, Finsbury’s CEO, said: “Despite the group’s short-term performance being difficult to predict with any certainty until we have a clearer picture of how Covid-19 will develop, we are encouraged by the healthy demand we continue to see in the larger retail side of our business.
“While the coming weeks and months are likely to be some of the more turbulent we’ve seen, the fundamentals of the business remain sound and we see no reason to believe the virus will damage the longer-term value proposition of the business.”
