Two of the UK's biggest food manufacturers, Northern Foods and Greencore, have battled with surging fuel and ingredients costs to record decent sales growth.

Goodfellas pizza maker Northern Foods' full-year pre-tax profit rose 25% to £50m with chilled foods and bakery star performers. Northern successfully reversed the declining sales and margins in biscuits by culling unprofitable own-label contracts and focusing on its core brands, Fox's and Matthew Walker puddings.

More expensive ingredients such as cocoa and flour prompted Northern to pass price hikes of 6.6% on to its retail customers yet sales still rose 3.9% to £205m. But chief executive Stefan Barden warned the trading environment remained challenging and he was also facing increases of 60%-70% in gas and electricity.

"We continued to perform in volatile markets, recovering unprecedented commodity inflation," said Barden. "Material costs in the period were almost 5% higher than the previous year, representing an annualised impact of £40m."

Sandwich giant Greencore put inflationary costs at £45m. It announced half-year sales up 2.5% to €649m (£513m) and pre-tax profit down 15%, but more significant to its results was the weakness of the pound against the euro. On a constant currency basis, sales were up 10.4% while operating profit increased 11.8%.

Following the acquisition of US chilled food group Home Made Brand Foods last month, CEO Patrick Coveney promised a 50/50 split between Europe and the international market in the next five to 10 years.