The group, which is a major supplier of products to Marks & Spencer, said underlying revenues grew 3.2 per cent in the past year, with 2.4 per cent of that figure coming through pricing.

Northern has sought to bolster its fortunes by ditching lower-margin business and refocusing on faster-growing markets.

It said profits for the year to the end of this week were likely to be stronger than the City's consensus figure of £47.5 million. Shares jumped 8 per cent as the update eased concerns about the impact of rising commodity prices.

Chief executive Stefan Barden, who took the helm in February 2007, said the company remained on the right track.

"We are operating in a volatile trading environment with inflationary commodity prices. However, we are confident that we will continue to make steady progress in realising the full potential of the business."

Last year, the company sold its speciality bread, chilled pastry, cakes and flour mill operations as it looked to focus on key brands as part of a drive to improve performance.