Privately-owned UK bakery firm Warburtons has seen the rising cost of wheat hit annual profits.

The company booked pre-tax profits of GBP43.4m (US$88.1m) for the year ending 30 September 2006, down from GBP49.1m a year earlier.

The fall in earnings came as Warburtons' raw material costs rose by GBP13.8m. The company, however, saw sales rise, jumping 16% to GBP209m.

Chairman Jonathan Warburton said the 12 months had proved a success. "Towards the end of the financial year we achieved full national listings with a major retailer for the first time in our history, a real milestone for the business, which we will now look to build on," he said.

"Looking ahead we continue to see further opportunities for growth."