Premier Foods has reported a first-half loss of £27.3m.

Profits for continuing business were up 3% to £72.2m, Premier said. But one-off charges and costs related to the sale of assets pushed the company back into the red.

The company reported a rise of 2% in sales for its so-called Power Brands, which include Mr Kipling, Loyd Grossman and Batchelors. But sales of Hovis were down almost 3% over the period to 30 June.

Chief executive Michael Clarke claimed the performance showed his strategy to turn around the company by focusing on its leading brands was paying off. He said Premier had also found £40m in cost savings over the period. But group debt remains at around £1.3bn.

“I’m pleased with the progress we are making to stabilise the business, re-focus the portfolio and invest in our future growth,” Clarke said.

“Our strategy of focusing on our Power Brands is starting to gain traction. Plans to simplify the business and drive further efficiency and effectiveness are proceeding ahead of plan.

“As we continue our divestment programme, we plan to take further costs out of the business. We remain cautious given the current economic and trading environment and our full year expectations remain unchanged.”