Premier Foods has renewed its long-standing licence to produce Cadbury-branded cakes, as part of its plans to grow the category.

The food group, which recently announced the proposed closure of two of its Hovis bakeries, has pledged its allegiance to the Cadbury Cakes brand until at least 2017.

The firm said the new licensing deal, negotiated with Cadbury owner Mondelēz International, would provide a platform to drive growth of Cadbury-branded cakes and ambient desserts, such as the Cadbury Mini Roll.

In addition, it explained that, subject to approval, the contract provided for the possibility of using the group’s other trademarks for cake and dessert products, "opening the door to a range of additional growth opportunities".

Michael Clarke, chief executive officer, said: "Renewing the Cadbury cake licence through to at least 2017 is an important step as we seek to build on the momentum in our grocery business. Cadbury is the fastest growing cake brand in the market and represents more than £60 million in annual sales.

"We intend to collaborate closely with Cadbury to expand consumer favourites such as Cadbury Mini Roll as well as leverage other Cadbury trademarks over time where this makes sense. This new agreement unlocks exciting growth opportunities in one of our core Power Brand categories."