Australian food manufacturing giant Goodman Fielder has released its full year results, showing a normalised net profit from continuing operations increased by 5 per cent on the prior year to $75.7 million.

The results have been largely attributed to improvements in the company’s baking division, with Goodman Fielder chief executive officer Chris Delaney saying efforts to deliver more acceptable earnings performance were starting to pay off.

“We are gaining further traction in turning around the baking division from the price increases we successfully implemented late last year related to our ‘cost to serve’ model and recovery of input costs, together with a continued reduction in the cost base through ongoing manufacturing and distribution efficiencies,” he said.

The CEO acknowledged the baking category, particularly in Australia, remains challenging due to the impact of private label products and competitor and in-store baking competition on proprietary brands.

Normalised earnings before interest and taxes in the baking division declined by 9 per cent to $49.5 million compared to the previous year.

Revenue for the baking division FY13 declined by 3 per cent to $897.8 million, reflecting lower volumes, particularly in the Australian market in the first half of the year.

Goodman Fielder, which is particularly strong in the fresh bread loaf category, instigated price increases for its proprietary baking products in late 2012, claiming it was needed to cover cost inflation.

The consolidation of the company’s operations in North Queensland was successfully completed in February 2013 with the closure of bakeries at Cairns and Rockhampton and an upgrade completed at the Townsville facility. The bakery at Whiteside, Melbourne, was closed in October 2012, while production of bread rolls at Tamworth, New South Wales, was outsourced in November 2012.

The company said it is continuing its project to increase distribution efficiencies by individually reviewing its regional distribution routes.