A clutch of solid figures from food manufacturers, including Northern Foods and Premier Foods as well as Glanbia, the Irish dairy firm, reassured the market this morning that consumer demand was holding up for ready meals and staples, such as bread and cheese.

Northern Foods described the quarter to Christmas as "robust", with underlying sales growth of 3 per cent, while Premier Foods, which is struggling to restructure a balance sheet laden with debt, said that its sales grew by 10 per cent in the second half of the year.

Premier said that it had generated "significant momentum" in its grocery and Hovis division and the figures were helped by the relaunch of Hovis, which is expected to have raised its revenues by 13 per cent over 2007 and gained 2 percentage points of market share.

Premier said that efforts to restructure its capital were proceeding well.

Its shares collapsed last year over concerns about the repayment of £1.8 billion in borrowings, but the company said that it had secured a £60 million working capital facility to fund its operations in the first quarter.

The new facility replaces a £125 million facility established in March last year.

Premier predicted that its full-year adjusted pre-tax profit would be between £185 million and £190 million.

Meanwhile, Glanbia predicted an increase of 17 per cent in earnings per share for 2008, in line with market expectations.

However, the Irish dairy company gave warning of unprecedented financial and dairy market uncertainties.

The company is Europe's largest producer of mozarella cheese for pizzas, and John Moloney, managing director, said that the firm would respond with a round of cost-cutting.

Food manufacturers are still able to pass on the increased cost of raw food materials to retailers and consumers.

At Northern Foods, the entire revenue increase in the third quarter to the end of December of 3 per cent came from a 3.8 per cent price increase, which the company said reflected continued successful recovery of higher commodity costs.

Prices in the bakery business rose by 2 per cent, with underlying revenue up by a similar percentage.

The company also recovered increased costs in its frozen-food division with prices up by 7 per cent.

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