Hovis posted a 7.3% decline in value sales last year across its bakery and milling businesses, but saw trading profit increase by 25.8%, according to annual results posted by parent company Premier Foods.

The figures for the year ended 31 December 2010, showed that total value sales for bakery fell by 6.1% to £516m, due to a 22.1% decrease in sales of supermarket own-brand products, while the milling business saw sales drop 10.6% due to declining wheat costs in the early part of 2010.

Premier Foods put the big fall in its own-brand business down to a general trend of consumers swapping retailer brand bread for branded bread, due to promotional activity. Hovis’ branded bakery sales increased 1.7% to £376m, helped by the launch of the new Hearty Oats loaf and market share gains in white bread.

Trading profit across all parts of the division increased to £39m from £31m due to distribution efficiencies, lower restructuring costs and reduced marketing spend in the second half.

Across its entire business, Premier Foods saw sales fall 3.5% and trading profit increase 0.6%. Net debt has been reduced to below £900m.