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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2011/02/premier-foods-reveals-debt-progress.jpg"><img class="alignnone size-full" title="Premier Foods - the makers of Hovis Bread - has announced progress on its debt mountain" src="http://londonglossy.com/wp-content/uploads/2011/02/min-premier-foods-reveals-debt-progress.jpg" alt="Premier Foods - the makers of Hovis Bread - has announced progress on its debt mountain"/></a></p>
<p>A slimmer Premier Foods revealed its debt mountain now stood below £1 billion as the maker of Mr Kipling cakes posted better-than-expected profits.</p>
<p>The UK&#8217;s biggest food manufacturer has recently sold its Quorn meat-free business and its canned grocery operation, including the Crosse &#038; Blackwell brand, for a combined £387 million in order to cut its debt burden.</p>
<p>Premier&#8217;s shares rose by 8% as it said its net debt, which stood at £1.4 billion in June after a takeover binge in recent years, has been reduced to less than £900 million following the sell-off and through its own performance.</p>
<p>The St Albans-based company revealed a slight increase in trading profits to £311 million in 2010, whereas the City expected a drop of 3%. Sales fell 3.5% to £2.6 billion as supermarket-own label revenues declined.</p>
<p>Shares in Premier, whose other brands include Bisto, Ambrosia and Sharwood&#8217;s sauces, nearly halved in value in 2010 as investors were put off by debts built up in a buying spree that saw it snap up the likes of Hovis owner RHM.</p>
<p>Premier&#8217;s own-label bakery business Brookes Avana saw its profits collapse from £15 million to nothing in the year as it struggled to pass on price rises.</p>
<p>The group is in constructive dialogue with Brookes&#8217; biggest customer Marks &#038; Spencer about changing its pricing and bringing in new ranges.</p>
<p>Premier has been forced to put up prices throughout its business in the past year as it battled commodity price inflation.</p>
<p>Last year it was involved in a spat with Tesco which refused to stock some Hovis products due to price rises driven by the soaring cost of wheat.</p>
<p>Commodity prices are currently rising at mid-single digit rates, which Premier claims is &#8220;manageable&#8221; at that level.</p>
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