An appetite for Hovis has helped offset a drop in Mr Kipling cake sales for the food group RHM, which reported a jump in underlying annual profits yesterday.

The firm behind Bisto and Sharwood's food products said it was harvesting the fruits of a growing demand for low-fat and high-fibre food with products such as Healthiest Ever Hovis, leaner cooking sauces and reduced-calorie cakes.

"Across all our activities, all the businesses are moving to offer healthier options," said the chief executive, Ian McMahon, unveiling the group's first set of annual results since it rejoined the stock market a year ago. "The trend is definitely there. And Hovis is synonymous with health because of its ... brown bread."

RHM said underlying operating profit rose almost 10% to £173.5m in the year to April 29. That was thanks to Hovis and Bisto - the 99-year-old gravy brand was boosted by the "Aah! Night" television campaign aimed at family mealtimes.

While the bread business grew, partly on the introduction of new loaves, Mr Kipling cake sales fell and RHM's overall cake profits were down more than 27%.

The sales slump does not seem to mean that healthy eating is so high up the agenda that consumers no longer have the odd treat. Britons bought more cakes last year, just not as many from Mr Kipling.

Mr McMahon said that after noticing a drop in Mr Kipling sales late last year an action plan was put in place. The group handed out samples to 350,000 homes, scrapped artificial colours and flavourings and introduced clearer labels.

Sales have stabilised in the past two months of RHM's financial year and the group believes a return to TV advertising could squeeze even more out of the 40-year-old Mr Kipling brand and the nation's £1.2bn prepacked cake market. It sees sales in the current 12 months at least matching those of last year.

That outlook and the overall tone of RHM's maiden results made sweet reading for investors. The group's shares rose more than 8% to 287p in afternoon trading. Analysts at Numis reiterated their "buy" recommendation. "RHM is currently trading at a substantial discount to the sector. It is one of the cheapest stocks in our sector universe, though this now looks poised for correction, and subsequent re-rating, given the improved news flow on the cakes business."