Premier Foods is due to release its full-year results tomorrow (Tuesday).

Analysts believe the food manufacturer will slash its final dividend by more than half in order to shore up its balance sheet and increase operational flexibility, according to the Financial Times.

Analysts are also concerned that with net debt approaching £2bn - almost five times Premier's annual earnings - the group could be close to breaching its banking covenants, the Daily Telegraph reported.

Shares in the company have fallen to record lows in the past week amid fears that Premier is close to breaching its banking covenants and analysts at Credit Suisse have cut their price target for Premier from 250p to 100p.