Food giant RHM said its Bread Bakeries division had seen a 21.8% increase in operating profit, as it posted its maiden interim results this week. RHM, which floated on the stock exchange in July, said Bread Bakeries’ operating profit was £34.7million over the half year to October 29, 2005. Turnover increased 3.1% to £385.8m year on year. The division saw increased sales of the new “Healthiest Ever Hovis” range and its Hovis Invisible Crust product. Demand for that had outstripped supply. RHM director of investor relations John McIvor told British Baker the product was still only baked at the Wigan bakery. Manufacturing was likely to be rolled out to other sites. Meanwhile RHM’s cakes’ turnover was £108m, down 13.1%, and cakes operating profit fell from £7.9m to £1m over the half year. The Avana cakes business had performed in line with expectations, but Manor Bakeries had been “disappointing,” RHM said.Mr McIvor said Manor had targeted the wrong customers with the relaunch of its Mr Kipling cakes in January 2005. It had aimed at the “ABC1” demographic. He said: “That worked, but we managed to deter our traditional core customers.” Manor had also reduced the number of lines on promotion, discouraging customers further. Purchase frequency went down. A new Mr Kipling range will be rolled out in the first quarter of 2006, with quality and packaging improved, a new “Delightful” healthy range added and a new pricing strategy, he said. Analyst David Lang from Investec said Manor Bakeries had been “whacked” by innovating away from its core. RHM was “firing on three cylinders”. Overall, RHM posted a pre-tax loss of £58.3m for the period from a profit of £54.6m the year before, due to flotation costs. Turnover was £739.3m against £736.8m. Operating profit was up 7.7% to £70.3m.