UK-based convenience foods group Uniq has said it expects trading in the UK to be adversely affected by an increasingly tough marketplace, which would hit group profits for the 2005/2006 financial year.

The company said it is carrying out a review of costs and structure aimed at alleviating the impact on profitability next year.

Regarding a possible takeover of the company, Uniq said it was still in discussions with one of the parties that made an unsolicited bid approach last year, but talks with all other parties have ended.

"Discussions with one of these parties on pensions are continuing although it has not yet been possible to resolve the issues surrounding the leveraged nature of the potential bidder's proposed capital structure in the context of the pension scheme liabilities," Uniq said.

In December, Uniq revealed that the funding covenants presented to the pension trustee had impeded progress, and that due to the lack of progress on this issue, negotiations had not moved to the stage of any detailed discussion of offer price or to any buyer due diligence.