* Says market sees full-year profit 162 mln-186 mln sterling
* Volume growth speeds up in Q3; Hovis sales rise 22 percent
* Falling pound an inflationary pressure
* Shares down 3.6 percent
By Farah Master
(Adds detail, Chief Executive comments, share reaction)
LONDON, Oct 15 (Reuters) - Premier Foods, Britain's biggest food manufacturer, said on Thursday it was confident of achieving profit in line with expectations this year after volume growth accelerated in the third quarter.
The group, whose brands include Branston pickle, Mr Kipling cakes, Bisto gravy and Hovis bread, said total branded sales were up 6 percent in the quarter to Sept 26. "As we enter the important Christmas trading period, we remain confident of achieving adjusted profit before tax for the full year within the range of market expectations," Chief Executive Robert Schofield told reporters in a conference call.
Premier Foods gave the range of market expectations as between 162 million and 186 million pounds ($259-$297 million).
Shares in Premier Foods were down 3.6 percent at 41.46 pounds at 0816 GMT. The group's shares have outperformed the UK food producers' index by around 24 percent over the past year.
Premier, which also makes Hartley's jam and Angel delight desserts, said Hovis sales were up 22 percent while sales in its grocery division were 2 percent higher than a year ago. Trading in Ireland continued to be difficult, with sales down 14 percent.
STERLING INFLATION
CEO Schofield said sales volumes rose for higher-margin branded products, which the company is looking to focus on, while sales of retailer-brand products fell.
But Darren Shirley at Shore Capital, which has a "sell" rating on Premier, said the fall in retailer-branded sales might become a concern.
"We can understand management wishing to focus on the robust branded growth, however, with 38 percent of business in own (retailer) label the loss of business in this area, and the potential impact on operational gearing cannot be ignored," the analyst said.
Schofield said that while the inflationary trend in food prices had eased, the depreciation of sterling was an additional concern.
"Twenty percent of what we buy is not in pounds so the weak sterling we have at the moment is an inflationary pressure," said Schofield.
Premier said it expects good cash generation in the second half of the year and will continue to focus on reducing its net debt.
(Reporting by Farah Master; Editing by John Stonestreet) ($1=.6259 Pound)