Premier Foods has reported mixed results for it Hovis business, with branded sales up 1.1% but non-branded sales down 26%, for the six months to 26 June 2010.

Trading profit for the division was up 50% to £15m, as profitability for the division was increased by cost savings in manufacturing and distribution, in addition to a lower restructuring spend for the period, said Premier.

Hovis branded bakery sales increased to £183m from £181m for the comparable six months in 2009. Branded bread value market share increased 1.1pp to 24.5%, while volume market share remained at 24.8%. Sales of its Mr Kipling brand were up from £60m to £62m (+3.3%), while Cadbury Cakes sales fell 3.6% to £27m.

Retailer brand bakery sales fell by more than a quarter from £100m to £74m. The firm put the decline down, in part, to a decrease in the retail price of branded goods in the markets in which it operates, which has resulted in consumers trading up to branded products.

Non-branded Hovis volumes fell 10.4%, of which 5.8% relates to wheat price deflation, according to Premier. Around 3% of the volume decline relates to “own-label bread contracts which were exited in 2009 to free up capacity for the Hovis brand expansion”, added the firm.

Milling sales were also down, falling 18.4% to £80m, from £98m for the first six months of 2009. The majority of the decline is due to bulk flour deflation, according to Premier.

Total group sales were down 5.2% to £1,183m. Trading profit fell 6% to £110m, while operating profit was up £40m to £67m.

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