The Real Good Food Company (RGFC) achieved increased sales last year, but profits suffered as a result of soaring commodity prices, with a decline in its bakery ingredients division from £5.6 million to £4m, according to its end-of-year results.

Revenue across its sugar, ingredients and bakery divisions rose to £231.1m, up from £221.7m in 2006, but total operating profit was £9.6m, down from £13.3m.

Sales in Renshaw, its bakery ingredients division, were 3.8% down from the previous year but, in a statement, the firm said that revenues remained in line on a like-for-like basis, following the disposal of its nut business and £400,000 of non-recurring income in relation to a supply agreement. Renshaw supplies a range of food ingredients to craft bakers and major cake manufacturers.

Meanwhile, RGFC’s Hayden’s Bakeries, which produces chilled and ambient premium patisserie and dessert products, saw strong growth for a fourth consecutive year with a 6% rise in sales. But the company said "profitability remained flat", partly as a result of higher raw material costs.

Chief executive Stephen Heslop told British Baker he believed the longer-term outlook for desserts and bakery products remained "fairly positive", but added that much depended on consumer confidence and broader market economics.People will "always buy indulgent products as treats", he said, but it remained to be seen whether these wider economic issues, including house prices, were transmitted to the high street.