Premier Foods has said it expects an increase in sales for its Baking & Milling division in the first half of this year.

In a trading statement, Premier said sales would be around 16% ahead year-on-year for the six months to June, driven by price increases. Sales of Hovis, which it bought when it acquired RHM last year, have stabilised, but volume sales are at a lower level than 2007. The company said it was pleased by the response of customers and consumers to the new recipe and packaging for the Hovis white loaf. It plans to rejuvenate the whole Hovis range over the second half of the year.

Chief executive Robert Schofield said: "Our expectations for the year remain unchanged, with progress weighted to the second half as the benefits of synergies from the manufacturing rationalisation programme, price increases achieved to date and the rejuvenation of Hovis flow through."

Premier said the integration of the Campbell’s and RHM divisions was progressing well, with five of the nine factories schedule to close already shut, and the remaining four to close over the second half of this year.

The group’s trading performance was in line with expectations, with sales up by 7%. The group had addressed input cost inflation by raising prices, it said.

In March, Premier said its bread price rise timing and consumer concerns about its Hovis white bread had played a major part in losses of £73.5m in 2007.

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