Premier Foods, the owner of brands including Mr Kipling and Bisto, has hinted that prices may rise in the months ahead as it battles cost increases and fights to build resilience in its supply chain.
The company said it was "successfully navigating" the challenges facing distribution – and its efforts to keep shelves stocked had contributed to a £23m spend during the first half of its financial year to 2 October.
While Premier did not explicitly say that it was going to raise prices, a move which could be passed on to customers by supermarkets, it noted that inflation was starting to bite its bottom line.
It said: "With further inflation now evident across a variety of input costs, the group will be taking a range of actions which it expects will be effective later this financial year."
Rising costs are being experienced globally as economies emerge from prolonged COVID-19 restrictions – with demand far outstripping supply.
Labour shortages, exacerbated by post-Brexit immigration restrictions, have compounded the issue and forced up wages for workers from delivery drivers to production staff.
Shares in Premier were down by more than 5%, despite the company's upbeat tone on its first half performance, as it revealed sales had fallen by 6.5% to £394.1m compared with the same period last year.
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Pre-tax profits were almost 40% lower at just shy of £31m.
The company said the key figures were up by 7.5% and 105% respectively on a two-year basis.
It argued that the comparable numbers for last year were skewed as households stockpiled treats and food during the pandemic.
Chief executive Alex Whitehouse said: "Our brands have performed especially well, with growth versus two years ago of 11.4% and increased market share in both grocery and sweet treats, illustrating the continued success of our branded growth model.
"I am particularly pleased with how well the business is successfully navigating the widely reported industry-wide challenges including logistics, labour shortages and input cost inflation to deliver such a strong set of results, which again underlines the robustness of our operating capabilities."
But AJ Bell's investment director, Russ Mould, said of the figures: "There was nothing 'exceedingly good' about the latest offering from Mr Kipling owner Premier Foods as it soured sentiment with a significant decline in first half revenue.
"The benefit from lockdown, when people reached for its brands amid a bout of comfort eating and cooked at home rather than eating out, has faded away," he wrote.