Profits at Bolton-based bread manufacturer Warburtons declined 37% to £16.3m in 2011, with the firm blaming increased competition and raw material costs.
Turnover for the year to September 24, 2011 at Warburtons Holdings was up slightly from £492m to £495m, but pre-tax profits were down 37% from £26m to £16.3m.
Raw material costs, principally wheat and energy, rose close to 13% from £149m to £168m. The directors’ remuneration package was cut from £4.3m to £3.2m, with the highest paid director’s pay cut from £1.4m to £1m.
Dividend payments were more than halved from £12.5m to £4.4m. Family-owned Warburtons, which is led by chairman Jonathan Warburton, had an average 4,659 staff in the period, down from 4,831.
The directors report said trading performance was not as strong as in the previous year. “Trading conditions worsened during the year and the bakery market declined in both value and volume. The main focus of the business remains on growing share of the bakery business in Great Britain.”
Jonathan Warburton, chairman and chief executive of Warburtons, said: “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.”
Warburtons said its 2012 financial results were “in line with expectations” and the Board views the outcome as “satisfactory in an increasingly challenging economic environment”.
According to the Bolton News, workers at both Warburtons sites in Bolton are ready to take part in a consultative ballot over possible strike action after bosses refused to increase a pay rise offer of 2%, which has already been rejected by 95% of members. They will be balloted between July 23 and August 3.
Warburtons has approximately 1,300 staff nationally, 300 of whom are based in Bolton.
One Bolton employee, told Bolton News: “This is a company with a £550 million turnover. [Last year] they gave £4.7 million in bonuses [to] 17 directors but our last pay rise was 16 months ago.”
In other news, the firm has just announced a new deal with Tesco. It will supply seven lines from its range of gluten- and wheat-free bakery goods to the retailer’s stores nationwide.
The products, which hit the shelves in the UK and Ireland this week, include its 400g white loaf, two-pack of lemon and poppy seed muffins, and three-pack of white rolls. Three lines have also been launched in Tesco Express stores.