RHM said its Bread Bakeries division had seen outstan-ding achievement by Hovis and an improved performance on cakes in the year to April 29, 2006.

In a trading update, the firm noted that a “much improved” financial performance in its Manor Bakeries cakes business in the second half, was due to “planned actions” including the closure of its Eastleigh bakery. But it was too early to say if “the issues affecting

Mr Kipling have been successfully addressed”.

Turnover for the year will be 2% ahead of last year, with profits in excess of £170million, compared with £158m the year before, RHM said. It will announce its preliminary results on June 29.