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Premier Foods, the owner of brands such as Hovis, Bisto and Mr Kipling, has warned its full-year trading profit will fall below expectations.

The UK's biggest food manufacturer had been looking at a profit of between £214m and £232m.

But the company said current trading was "disappointing" and "significantly behind our expectations".

Sales in the third quarter fell 3.6% on a year ago, while the group's market share declined by 1.9%.

The group said it was in "constructive dialogue" with banks on refinancing.

Shares in Premier Foods closed down more than 4 pence, or 42%, at 5.8p.

New chief executive Michael Clarke has outlined five key priorities for the business in the short term.

These are agreeing a refinancing plan, improving sales and marketing, reducing the size of Premier's portfolio, reducing costs, and investing in eight "power brands" that they feel have the best growth prospects.

The eight brands are Ambrosia, Batchelor's, Bisto, Hovis, Lloyd Grossman, Mr Kipling, Oxo and Sharwood's.

Mr Clarke, who had previously been president of Kraft Foods Europe, took the helm at Premier Foods on 1 September.

'Mettle tested'

Martin Deboo, analyst at brokers Investec Securities, said the company now faced a question of survival.

"To say that all this adds up to a baptism of fire for new chief executive Mike Clarke feels like the understatement of the year. His mettle is going to be strongly tested in the run-up to Christmas," he said.

Premier saw declining sales across the board. Grocery sales were down 5% in the quarter, bakery sales fell 7.6%, and sales at its Brookes Avana business, which makes own-label ranges for supermarkets, dropped 13.2%.

Many retailers have been reporting tough trading conditions as consumers rein in their spending

Earlier this week, supermarket giant Tesco said its like-for-like UK sales, excluding VAT and petrol, had fallen by 0.5% in the first half of the year.