Premier Foods has revealed a drop in overall bread sales of 0.7% to £240.6m for the six months to 30 June 2013.

Total sales in the Bread division, which includes milling, increased by 8.2% to £355.9m. However, its divisional contribution fell 23.8%, to £14.3m, despite milling sales increasing by 33%.

Branded bread sales were up 1.8% to £185.2m, while non-branded sales dropped 8.3% to £55.4m, with the firm adding that the restructuring programme in its bread business was “well ahead of plan”.

Earlier this month Premier announced it would be splitting the management structure of its milling business, in addition to closing a mill in Barry, Wales.

The company said it would be setting up a “dedicated management structure” to oversee Rank Hovis’ free trade business – and would “vertically integrate” its remaining milling operations into its bakery business.

Sales of its Grocery Power Brands were up 4%, with underlying profit for the whole business up 50% to £47.4m.

Gavin Darby, chief executive, said: “A 50% increase in trading profit is a very encouraging result given the highly competitive environment. This shows that our turnaround strategy is delivering at the bottom line. 

“We have now grown sales in our Grocery Power Brands for six consecutive quarters as we continue to build partnerships with our customers, deepen our understanding of consumers and invest more effectively in supporting our brands.”

He added that the second half of the year would see further activity to grow its Power Brands, as well as implementing a further £10m in cost savings, which he said would see the firm expecting to achieve full-year trading profit “around the top of market expectations”.