Finsbury Foods has warned that it expects profits to drop by between 1% and 2% this year despite reporting a 12% increase in sales in the past six months.

Finsbury said its bread and free-from divisions had notched up like-for-like growth of 16% and 23% respectively for the period. But sales of its cakes edged up by just 4%.

The company said there had been an increase in demand for its Thorntons and WeightWatchers licensed products, following a pledge by Finsbury in November to tighten its focus on those relationships.

"We have now entered the second half of the current financial year and we continue to invest heavily in promotional activity to support our customers," Finsbury said in a statement.

"We will continue to adapt our broad product range to reflect changing consumer needs whilst driving improvements in efficiency throughout all aspects of our business."

But Finsbury warned that the current environment made it difficult to maintain existing margins. "The consumer environment for the next six months remains uncertain [and] operating margins are likely to be between 1% and 2% lower than last year," it added.