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Factory jam causes profit warning at Spongegroup

Spongegroup plc yesterday issued a profit warning to the financial markets in London amid increasing concerns about the impact of last month’s factory jam. An emotional Cathy Clyde MBE, chief executive of Spongegroup, told the Floor that “…at this very sticky time for Spongegroup and in particular it’s SBUs (strategic business units) within the cake and soft biscuits industries [we are still feeling the effect of] last month’s factory jam.”

The overuse of jam-based ingredients caused much of the machinery used by Spongegroup to make cakes, biscuits and, ironically, fruit preserves to clam up and ultimately fail. This reduced total shipments of much loved products such as Dr Bizarre’s Oat Biscuit Nightmare Surprise and Janie Dodge Hers, with supermarket stores having to bring in armed security guards to quell the atmosphere of public hysteria displayed during the crisis.

Workers in the affected facility reported horrendous conditions immediately after the incident, with one man quoted as becoming “emblazoned with jam”. Shipments of popular Spongegroup products have been exported from factories in the Cook Islands, although conflicting reports have emerged which allege the products were “well past their sell by date” by the time they arrive in the UK.

Spongegroup spokeswoman Kelly McNab earlier this week issued a statement to ease consumer tensions, insisting that supplies would return to pre-jam levels within “a week”. The incident is likely, however, to hit annual company revenues hard, with extra expenditure on so called “jam cleaners” also eating in to profits. The announcement is the latest in a long line of negative headlines the company has had to endure this year, following February’s revelation that many of the products produced contained, according to the packaging, “stones”. The company insisted at the time that stones would not harm any part of any typical nutritional diet and that, at just 0.8% of the total ingredients, there was “…less stones than bloody glycerol mono-stearate…and that’s in just about everything nowadays!”

Shares in Spongegroup nosedived yesterday to a year low of 55p a share, but by lunchtime had rallied to a year high of £5,600.12.