Premier Foods, Britain's biggest food producer, has said it expects to meet its full-year sales and profit targets, but it will need to raise bread and flour prices again if wheat prices remain high.
The firm, home to Branston Pickle, Oxo stock cubes and Hovis bread, said operating profit before goodwill and one-off items more than doubled to £96.8m in the first half of 2007, boosted by recent acquisitions.
But underlying operating profit at the group's bread business halved amid a recent doubling in the price of wheat. Premier Foods said it had increased flour and bread prices at the start of this month, but that it might need to do more.
Premier Foods has bought its way to becoming Britain's largest food group in terms of sales, acquiring Campbell Soup's British and Irish operations and RHM, the maker of Mr Kipling cakes.
But the deals have led to a big rise in Premier Food's debts which, along with concerns about high ingredient costs, has hit the firm's share price amid the current turmoil in debt markets.
