Premier Foods said in a statement released ahead of the 2005 financial results, due in March, that thanks to a strong Christmas performance it expects to deliver annual profit in line with expectations.

"The impact on sales of exceptionally mild autumn weather has been compensated for by healthy Christmas trading." chief executive Robert Schofield said in the statement.

Excluding the company's troubled potato packaging section, MBM, sales from continuing operations rose 15%. Underlying sales, stripping out acquisitions and disposals, grew by only 2 %, after the inclusion of a sharp fall in revenues at MBM. However, it is expected that MBM profits will recover throughout 2006, as four of its six packaging facilities have closed and it now supplies a wider range of fresh produce. New products, such as Ambrosia snack pots, Hartley's fruit smoothies and Branston baked beans, performed well, the company reported.

The company stated that it has successfully off-set higher energy costs with price increases. "We were looking to offset the exceptional level of inflation in energy costs through price rises and we are pleased to have achieved a satisfactory level of cost recovery," Schofield said.

He concluded that 2005 was an 'active' year for Premier: "The acquisitions and disposals we have made during the year have strengthened our portfolio and taken the share of our grocery sales from branded products to over 60%.  They have also moved our portfolio into higher growth categories and we are well placed to take advantage of the increasing trend for 'healthy eating'."