Premier Foods, Britain's biggest food maker, said today its 2007 profit would be within the range of analysts' forecasts, but expected trading to remain competitive and impacted by higher raw-material costs.
The firm, which makes Hovis bread, Oxo stock cubes, Mr Kipling cakes and Branston pickle, said it had a satisfactory Christmas, with strong sales of cakes - particularly mince pies - offset by a weak performance from retailer branded products.
A spokeswoman said analysts forecasts for 2007 underlying profit ranged from £274 million (€365 million) to £289 million (€386 million) .
Proforma sales, adjusted for Premier Foods' recent acquisitions of RHM and Campbell Soup's UK and Irish operations, were up 3 per cent in the second half of the year, reversing a fall in the first half and making a total increase for 2007 of 1.4 per cent.
The firm, which also makes Quorn meat substitute, Sharwoods sauces and Bisto gravy, said cost savings from the acquisitions remained on track.
Premier Foods shares fell around a third in value last year and have underperformed European rivals by about 50 percent on concerns the firm would have to reinvest most of its cost savings in order to cope with rising prices of raw materials, such as wheat and dairy goods, and stiff competition.
Premier Foods shares closed at 188.25 pence yesterday, valuing the business at about £1.7 billion (€2.27 billion).