RHM, the food group that owns such household names as Mr Kipling and Hovis, brought relief to investors as it said it anticipated first-half results in line with expectations.

The company releases its interim results in December. In yesterday's trading update, it said its bread bakeries division, which analysts estimate accounts for nearly half of its earnings, had delivered "strong" sales which helped mitigate the impact on operating profits of higher energy and wheat costs. Wheat futures in Chicago rose to their highest last month since the middle of 1996.

But RHM said overall sales for the six months to end October rose more than 2% compared with the same time last year and operating profit was expected to be flat at about £70m. Its culinary brands division, including Bisto and Sharwood's, suffered in the first four months from the hot summer, some retailer destocking, and increasing competition. But the group said trading in September and October had been good. In cakes, Mr Kipling continued to recover and it said the new Cadbury's branded cake bar range had been well received.

Analysts at Shore Capital Stockbrokers said: "We are relieved that RHM has not disappointed today, given the track record since its flotation." Stephen Payne, an analyst at Corporate Synergy, added: "Overall there is an improving trend coming through in a number of areas although the business still faces a number of challenges."