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Last Updated: Friday, 28 October 2005, 16:28 GMT 17:28 UK
Cake sales crumble at Mr Kipling
Battenburg cake
Mr Kipling's offerings include Battenburg cake
Shares in the maker of Mr Kipling cakes, RHM, fell by 8.62% on Friday after the company revealed a slump in sales of its cakes and slices.

RHM said it expected turnover from cakes to have dropped by 12% in the six months to the end of October.

The UK food company, whose brands also include Hovis bread and Bisto gravy, has spent 8m ($14m) so far this year promoting Mr Kipling products.

But RHM said it had been hit by "a slowdown in the overall cake market".

Shares in the company, which returned to the London Stock Market in July after a 958m flotation, were down 25p at 265 pence at close.

Bread rises

RHM holds more than 30% of the UK cake market through its Manor Bakeries division. It also produces Mini Rolls for confectionery giant Cadbury's and cakes under the Lyons brand name.

But the company admitted that the performance of its cake division had fallen below its expectations since the company's flotation earlier this year.

RHM said sales at its other businesses had been in-line with expectations, with Hovis bread and Bisto gravy achieving growing market share.

Buckinghamshire-based RHM said it expected first-half turnover from continuing operations to be little changed from the 737m it reported last year.

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