Food giant Premier Foods has increased its losses due to impairment charges, largely related to its sweet business, which includes the Mr Kipling brand.
The company saw losses after tax of £92.7m in its full year results, after it impaired its goodwill to its sweet treats sector by £67.9m.
For the full-year period to April 2015, branded sales were down 4.1% to £683.7m. However, for the last quarter, branded sales remained flat at £170.1m.
The food firm explained that the impairments were because goodwill from past acquisitions was allocated to the combined grocery and sweet treats business units. However, as a result of restructuring it had reassessed the carrying value of its sweet business as a standalone entity.
Meanwhile, the company is set to implement a new snack pack line at the Barnsley factory in South Yorkshire, which has reached commissioning stages.
It said this would increase the snack pack slices capacity by over 130% and give additional flexibility on pack format sizes - providing opportunities to enter the convenience channel through twin-pack formats.
Trading profit was in line with expectations at £131m, and the company believed the sweet sector, which includes its power brand Mr Kipling, “presents many further opportunities for future growth”.
Gavin Darby,chief executive, said: “While it is encouraging to note the return of volume growth to both our categories and the wider grocery market, we expect the near-term trading environment to be challenging, and our expectations for the year are unchanged.
“I remain confident that our strategy of investing in brands, innovation and infrastructure is the right one for Premier Foods, and see increasing evidence that our efforts are starting to pay off. The Board is firmly focused on the creation of future value, and believes that its investment and growth strategies, combined with a focus on cost efficiency, trading profit delivery and organic de-leveraging, are well positioned to deliver success.”
The company was upbeat about its major cake brands, Mr Kipling and Cadbury cake.
It said that the branded relaunch of Mr Kipling, along with a strong advertising campaign in 2014, had increased volumes, sales and share in the quarter.
It also said that volumes, sales and share increased for Cadbury cake due to the earlier timing of Easter 2015.
During the first half of 2015/16, Cadbury cake will benefit from its first TV advertising campaign for eight years and will see new limited-edition products launched in time for Halloween.