Raisio Group - the Finnish company behind brands such as Dormen, Fox’s and Honey Monster - has reported further losses and sales decline in its troubled UK business.

It blamed losses in its UK cereal and snacks business for a €2.5m drop in group operating profit (EBIT) to €8.5m for the second quarter to 20 June. Without this, Raisio CEO Matti Rihko said profits would have improved by €600,000.

Raisio said the second quarter was challenging for its UK cereals and snacks businesses.

While sales of its Good Grain brand improved thanks to increased demand for healthy products, Honey Monster sales fell in a declining market. “Sales decline in Honey Monster cereals compared to the beginning of the year was stopped, but net sales were lower than a year before,” said Rihko. It comes after a difficult 2013 for the brand, when sales slumped 20.9% to £16.9m [Nielsen 52 w/e 12 October 2013].

He said the company was taking steps to “renew” the Honey Monster brand, but that recovery of cereal sales was expected to be slow.

Raisio’s snack subsidiary Halo Foods recently closed a plant in Tywyn, Wales, moving production to Newport. Issues relating to the transfer of production hit sales and service levels, though Raisio said the situation improved in June.

Raisio is also in the process of closing its confectionery factory in Skegness and transferring production to Leicester and the Czech Republic. Production has already transferred to Leicester and new Czech lines are expected to become operational in September, it said.

Raisio’s branded division sales - of which about 42% come from the UK - dropped 5.8% in the quarter to €78.1m.

Having previously guided for continued improvement in EBIT, Raisio said EBIT for the full year would be below the level of 2013.