Despite revenue growth for its Kingsmill brand, strong competition, driven by a high level of promotion, has squeezed margins at Allied Bakeries.

Parent company Associated British Food’s (ABF’s) pre-close statement said Allied had continued to invest – notably with the new bread line at its Stockport bakery. However, it said a “rationalisation charge” was made for the closure of two smaller bakeries, and the cost of further overhead reductions.

ABF said that profit in its sugar business will be substantially ahead of last year, driven by a strong sales increase in the UK, as well as further improvement in Spain.

Its interim results, to 3 March 2012, are due to be announced on 24 April 2012.