Bakery manufacturer Finsbury Food Group (LON:FIF) reported a significant fall in revenue in its full-year results, sending shares down on Monday morning.

The group said revenue fell 3.4 percent to £303.6 million in the year to June 30. Its UK bakery division grew 2.8 percent on a like-for-like basis in the period, however, ahead of the wider market.

The company still expects to deliver profits in line with market expectations, but attributed the fall in revenue to a challenging environment.

The group said: “In what has been a very challenging environment with unprecedented commodity and labour inflation, the group has done well to recover those cost pressures through a combination of operational efficiency and price recovery.”

Boss John Duffy said: “We are pleased with the resilient performance of the group in what has once again been a period of market-wide inflationary pressure, illustrating that the work and investment undertaken in prior periods has continued to bear fruit.

“The group is robust, well diversified and in a strong position to continue to deliver on its strategic objectives in the period ahead.”

Shares sunk over 3 percent on the news, but have since regained ground. They’re currently trading down 1.91 percent at 112.80 (1101GMT).