HOVIS maker Premier Foods yesterday reported that revenues from bread sales were up 16 per cent in its first trading half after it increased prices to cope with soaring wheat costs.
The food giant, which also makes Mr Kipling cakes and Branston Pickle, said price hikes across its bread and flour ranges in the half year to 28 June reflected "continued pressure from wheat and other input costs".
Chief executive Robert Schofiel
d also warned of further potential price hikes: "We have forward sight of inflationary pressures and have plans in place to mitigate them as they occur."
The group said sales of its big-selling Hovis brand, which suffered a series of quality and pricing problems last year, had now stabilised.
But sales volumes of the product are still lower than a year ago, it said.
Premier's overall sales were 7 per cent ahead for the first half, again driven by price rises.
The group, which cut its dividend and renegotiated its finances in March as it struggled with high commodity costs and the impact of the credit crunch, also said trading profit had been in line with the first half of 2007 when it made a profit of £120 million.
"Our expectations for the year remain unchanged with progress weighted to the second half," Schofield said.
Premier said the integration of RHM and Campbell's, both acquired in 2007, had proceeded ahead of schedule, with five of the nine factories scheduled for closure already shut and the remaining four due to close in the second half.
The company said its debt had risen to £1.82 billion by the end of June compared with £1.61bn at the end of 2007.
The full article contains 287 words and appears in The Scotsman newspaper.
