UK-based Canterbury Foods, which makes beef burgers, sausages and pastry products for the foodservice and fastfood markets, has said it has had a challenging second quarter, due to high red meat prices and reduced market demand.

"Despite these pressures, the business has been able to control its costs and the half-year result should be approximately in line with expectations," chairman Christian Williams said.

The company, which also supplies cooked sausages, bacon, stuffing and pastry to other food manufacturers, said it does not expect existing pressures on the business to subside before the end of the second half, and does not expect red meat prices to ease before the middle of 2005.

"Although we are continuing to press for price increases wherever possible, we see little prospect of recovering this cost inflation through price in the short-term. Our continued focus is both to drive top line growth and to continue to improve operational efficiencies to mitigate the margin pressures in the business," Williams said.

"Despite the current overall lack-lustre trading environment, we are confident that the improvements to the business will continue over the coming months," he added.