Premier Foods, which also makes Mr Kipling cakes, described trading conditions as challenging but said it met its profit target for the half year.

The profits figure fell 29 per cent to £3.6m, but Premier said growth was weighted towards the second half as a result of the price rises, a factory closure programme and efforts to rejuvenate its Hovis brand.

Premier has invested £15m in the Hovis brand in 2008, including recipe improvements to enhance the texture and flavour of the bread.

It launched a soft white loaf earlier this year and is planning a significant promotional campaign for the rest of the range next month.

The drive will include new packaging and television advertising, which Premier hopes will return Hovis to market share growth.

The need for a turnaround was revealed in today's results, with bakery profits down 23 per cent to £14.6m, primarily as a result of lower volumes. Significant price rises meant turnover still increased 16.1 per cent to £462.7m.

Hovis, which was acquired as part of Premier's takeover of RHM in 2007, dates back to 1886 and is one of the UK's best known grocery products, helped by the television commercial featuring the delivery boy pushing a bike up a hill.

The acquisition of RHM took Premier into the bread category for the first time and made Hovis the largest brand within the company. The first year of ownership has proved challenging for Premier, with rising overheads and strong competition from a resurgent Kingsmill and privately-owned Warburton's.

In Premier's grocery division, which includes brands such as Branston's, Hartley's and Mr Kipling, turnover increased 2.3 per cent to £630.5m. This reflected price increases totalling 6.2 per cent, offset by a 3.3 per cent decline in volumes.

As well as recovering recent cost inflation, Premier chief executive Robert Schofield said the company had good visibility on future cost rises.

He added: "We have achieved the key price increases that were needed to recover input cost inflation seen to date and have continued to invest behind our portfolio of brands and staple food products to ensure they prosper through the current difficult economic conditions.