Premier Foods forecasts further growth

The firm, whose brands include Hovis bread, Branston pickle and Bisto gravy, said it made a trading profit of 323m in the year to December 31.

That compares with company guidance, issued last month, of around 320m.

Group sales rose 2.2 per cent to 2.66bn, with sales of branded products rising 6.5 per cent, accounting for nearly two thirds of the total.

Premier said Hovis performed particularly strongly, with market share up 3 per cent over the year to 25.9 percent.

Other strong performers were Ambrosia and Hartley's desserts, Loyd Grossman and Homepride cooking sauces and Batchelor's soup and noodles.

However, higher input costs and an increase in promotional spend as the firm reacted to price cuts by competitors caused gross margins to fall, leaving trading profit in the grocery division flat.

Premier Foods, which last year renegotiated its banking facilities and raised 379m in an equity fundraising, ended 2009 with net debt of 1.37 billion pounds.

The company employs about 360 staff at its Quorn manufacturing sites in Stokesley, North Yorkshire, and Teesside.

Shares in the firm, which have lost a quarter of their value over the last six months, closed on Monday at 32.3 pence, valuing the business at 774m.