Shares in Premier Foods rose 6.75p to close on 98.75p yesterday despite disappointing full-year figures from the food manufacturer.

Premier reported a full-year pre-tax loss of £73.5m against profit of £59m the year before and warned trading profit in its bread division, which makes Hovis, would be lower during the first-half of the year because of lower volume levels and investment in recipe changes.

Analysts were relieved the company had revised its banking covenants and agreed additional banking facilities, but still remained cautious.

“With cost inflation continuing to constrain the performance, we would not be surprised if the measures taken to alleviate the balance sheet pressure proved inadequate, leading to more conversations with bankers,” Rob Mann, an analyst at Collins Stewart, told the Daily Telegraph.