The maker of Hovis bread and Bisto, Premier Foods, has reported that losses narrowed to £23.5m in the six months to the end of June.
In the same period last year, it recorded a loss of £45.8m. Sales for its bread division rose 8.2% to £356m, but total grocery sales declined by 1%. Costs for reorganising the business totalled £12.4m, which included the closure of three bakeries and two distribution sites.
These results mean Premier Foods expects full-year results to be at the top end of forecasts after cost cuts helped the group to report a 50% leap in first-half trading profit.
After refinancing and selling assets last year to help reduce debt built up before the financial crisis, Premier Foods is stepping up marketing for its eight best-selling brands, such as Batchelors, Ambrosia and Bisto gravy. It is also shaking up its bread unit to improve profitability.
As a result of its decision to 'restructure' its bread business, Hovis received 'more selected levels' of brand investment, with campaigns planned for Cadbury cake and Mr Kipling expected later in the year.
It was also claimed that media spend efficiency had been improved by 40 per cent during the first six months of the year.
Premier Foods expects to be able to find another £10m of savings in the second half by working with fewer suppliers.
Gavin Darby, CEO of Premier Foods described in trading profit increase as "very encouraging".
He added: "This shows that our turnaround strategy is delivering at the bottom line. We have now grown sales in our Grocery Power Brands for six consecutive quarters as we continue to build partnerships with our customers, deepen our understanding of consumers and invest more effectively in supporting our brands."
For more information on Premier Foods, see the latest research: Premier Foods
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