Aug. 5 (Bloomberg) -- Premier Foods Plc, the baker of Hovis bread and Mr. Kipling cakes, said it aimed to meet full-year profit forecasts after posting a first-half loss on costs related to foreign-exchange hedging and pension financing.

The net loss for the six months to June 27 was 35.9 million pounds ($60.7 million), or a loss of 2 pence per share, compared with net income of 1.3 million pounds, or 0.1 pence, in the same period a year earlier, the St. Albans, England-based company said in a Regulatory News Service statement today. Revenue climbed 3.5 percent to 1.25 billion pounds.

Cost inflation, the strengthening of the pound relative to the dollar and euro, and “a movement in the pension financing adjustment” hurt earnings, the company said.

“Cost inflation remains an issue, which we will continue to offset through pricing and efficiency savings,” Chief Executive Officer Robert Schofield said in the statement. “We continue to focus on cash generation and debt reduction and we are on course to deliver our full-year profit expectations.”

Premier has said it plans this year to pay down some of the debt the company amassed through a series of acquisitions, including food producer RHM Plc in 2007. Net debt was reduced to 1.48 billion pounds from 1.81 billion pounds a year earlier, Premier said today.

Premier dropped 1.3 percent to 39.5 pence at 8:09 a.m. in London trading, valuing the company at 947 million pounds. The stock has risen 51 percent this year.

To contact the reporter on this story: Matthew Campbell in London at mcampbell39@bloomberg.net; David Merritt at Dmerritt1@bloomberg.net.

Last Updated: August 5, 2009 03:12 EDT