Premier Foods’ half-year results show that sales of Hovis were up 17% and market share has increased to 26.3% – its highest level in two years, said the firm.

But Premier’s Hovis division, which comprises its baking, milling and frozen pizza base operations, saw turnover drop to £372.4m, (from £384.7m in first year half 2008), although trading profit increased 18.7% to £14.6m (first year half 2008: £12.3m).

The figures for the six months to 27 June 2009 show sales in its baking operations were up 4.9%, “driven by a 12.4% increase in sales of branded bread, partly offset by lower sales of own-label bread and morning goods”.

Its milling operations saw sales fall 20.7%, which Premier puts “primarily” down to the exit from a low-margin flour contract in the latter part of 2008.

Chief executive Robert Schofield commented: “Now that we have substantially completed the integration of RHM and Campbell’s and successfully refinanced the group, we have been able to embark on targeted investment behind our key market-leading brands.”

He added that he was pleased with the group’s progress and delighted by the continued success of Hovis.

Group turnover was up 3.5% to £1,248.2m, but operating profit stood at £26.8m, down from £46.2m in the first half of 2008. The firm made a loss before tax of £30m, compared to profit of £2m in first year half 2008. This was due to one-off costs, including pension charges plus costs related to its acquisition of RHM and Campbell’s UK business.

Premier reduced its net debt to £1,475m (June 2008: £1,806m).