Food group Cranswick warned today that the rising cost of raw materials and would dent operating profits this year - despite 'strong gains' in sales of its fresh and processed pork.

In a quarterly stock market trading update, Cranswick said the difficulties facing UK consumers and the competitive market for food products were making 'the current financial year more demanding than usual'.

Cranswick - which bought the Bowes production facilities in Watton in 2009 and renamed the operation Cranswick Country Foods - said it expected operating profits in the first half of the 2011 financial year to be below the profits for the same period in 2010.

'Raw material costs increased during the quarter and are being actively managed through on-going discussions with the group's customers,' Cranswick said.

'The extent of and time lag in recovering these rising input costs together with other inflationary pressures, are expected to impact the company's operating margin during the first half.

'As a consequence, the board now expects operating profits for the first half of the financial year to be lower than those of the corresponding period last year.'

Underlying like-for-like sales for the three months to 30 June 2011 increased by 5pc, Cranswick said. But total sales for the first quarter were �195m - 2pc down on the same period last year.

The firm said that the dip in total sales reflected business that had transferred to Farmers Boy (Deeside) Limited.

'During the period, most categories delivered strong growth,' Cranswick said.

'Sales of continental products were lower but there were strong gains in fresh pork and bacon and continued growth in sandwiches and sausages.

'Underlying sales in cooked meats were also ahead of the same period last year.'

But striking a note of caution about the second half the financial year, Cranswick added: 'The difficulties facing the UK consumer and the dynamics of the competitive UK market in which the company operates are making the current financial year more demanding than usual.

'Whilst it is still early in the financial year, the board now expects to deliver a full year result below its original expectations, given the factors referred to above.'

But the firm said it was in a 'sound financial position' and that the board 'remains confident in the continued long term success and development of the business'.

Hull-based Cranswick's operations span the processing and supply of fresh pork, sausage, bacon, cooked meats, charcuterie and sandwiches to food retailers, service companies and manufacturers - supplying pork products for the Jamie Oliver brand as well as Sainsbury's and Tesco.

Results for the year to 31 March 2011 showed sales of �758m and profit before tax of �47.1m.