250 jobs at risk after closure of Grain D’or factory site
EASYJET HAS said that full-year profits will come in at the top end of its forecasts after a record quarter, but warned that it will take a £100m hammering following the collapse in the pound.
The firm has been helped in recent weeks by a shambolic showing from rival Ryanair, which has had to cancel hundreds of flights after miscalculating pilot leave, and the collapse of fellow budget carrier Monarch.
EasyJet said it carried 24.1 million passengers in the three months to September 30 as travellers chose low summer fares to beach destinations.
As a result, EasyJet said fullyear pre-tax profits are expected to come in between £405m and £410m, the upper end of its previously guided range.
However, this is still well below last year’s £495m profit, with the firm booking a £100m hit from the plunging pound.
Chief executive Carolyn McCall, who will leave the company to take the top job at ITV in January, said: “EasyJet has finished the year with continued positive momentum delivering both a strong final quarter and a strong second half.
“Passenger numbers and load factor in the final quarter set new records.
“The market continues to be challenging and easyJet has had to absorb a significant currency impact of £100m in the year.
“However, EasyJet continues to operate Europe’s strongest network and the current turmoil in the sector provides EasyJet with opportunities to capitalise on its strong customer proposition and grow and strengthen our positions in Europe’s leading airports still further.”
The firm has also been boosted by a lower fuel bill, which is expected to decrease by between £230m and £235m compared with last year.
Ms McCall leaves the lowcost carrier just as Brexit storm clouds gather over the travel industry.
The pound’s collapse has meant fewer people travelling overseas and British airlines are at risk of being grounded unless ministers strike an aviation deal with the EU before March 2019.
EasyJet confirmed earlier this year that it has applied for a new air operator’s certificate (AOC) in Austria to allow it to continue flying in the European Union after Britain’s divorce from the bloc.
Analyst George Salmon at Hargreaves Lansdown said: “Outgoing CEO Carolyn McCall may still describe the market as challenging, but it seems things are finally starting to look up at EasyJet.
“The demise of Alitalia, Air Berlin and Monarch has relieved some of the over-capacity issues in the sector, and while Michael O’Leary may now have extended an olive branch to pilots in the form of better conditions and pay, the disruption at Ryanair has gifted EasyJet an opportunity.
“With passenger numbers and load factor both hitting a record high this quarter, EasyJet is ending the year with good momentum. The net effect is that profits look set to come in marginally above expectations, putting EasyJet on a smoother flightpath than investors had feared after the post-Brexit profit warning.” FINSBURY FOOD Group has confirmed that it is to shut its loss making Grain D’Or pastry factory, resulting in the potential loss of 250 jobs.
Following a consultation with employees and union representatives, Finsbury said it will shut the Brent-based bakery by December 2.
The group said in a statement: “The company has engaged extensively with employee representatives to carefully consider the future of the business, however no viable alternatives to closure have emerged.
“As a result, 250 employees are at risk of redundancy at its London site.”
Finsbury said it will try to offer affected workers alternative employment in other group locations and has entered consultations with those affected.
The group’s UK bakery division has manufacturing sites in Sheffield, Manchester, Cardiff, East Kilbride, Hamilton and Salisbury.
Finsbury acquired Grain D’Or as part of its takeover of the Fletcher Group of Bakeries in 2014 but the pastry and bread supplier is facing the chopping block after failing to turn a profit amid rising competition.
During the 12 months to July 2017, Grain D’Or generated £28.5m in revenue but booked an overall operating loss of £3.3m.
Finsbury is expected to take an exceptional cash cost associated with the closure of Grain D’Or of up to £10m.
When the original announcement was made in August, the Bakers, Food and Allied Workers Union blamed the closure in part on the failed renewal of several key supermarket contracts – including Marks & Spencer and Sainsbury’s – that had accounted for about 60 per cent of Grain D’Or’s volumes.
Finsbury is a leading manufacturer of cakes and bread, supplying a broad range of blue chip customers within both the retail and “out of home eating” sectors.
It makes celebration cakes, cake slices, artisan and organic breads, rolls, muffins and morning pastries.