Patties Foods hopes to post a seven per cent increase in full year profit as its Four'N Twenty pies sell well despite tough trading conditions and pressure from the major supermarket chains.
The maker of other famous brands, such as Nannas and Herbert Adams, on Monday said its margins had come under pressure in the supermarket category as the popularity of private label products continued to grow.
But Patties managing director Greg Bourke said the popularity of Four'N Twenty pies at football matches and new national distribution contracts at Brumbies and BP service stations had contributed to sales growth in fiscal 2012.
"We sourced supply rights in most NRL and AFL stadia and our view the great Australian sporting event is having pie at the footy," Mr Bourke said.
"If consumers have a good experience at the footy, they're more likely to buy some at the supermarket or buy some in their petrol convenience stores."
The Four'N Twenty brand is now the largest brand available in service stations, Mr Bourke said.
Patties, which recently launched a new chicken parma pie, said it expected net profit after tax (NPAT) for the year to June 30, 2012, to increase by between 4.3 per cent to seven per cent, in the range of $19.2 million to $19.7 million, after recording an $18.4 million profit in fiscal 2011.
Four new products were being tested by focus groups while Patties staff continued to work on producing around 20 new products from a pool of 90 ideas.
Mr Bourke said while consumer sentiment remained challenging, with continuing margin pressure in the dessert category, Patties would continue to invest in developing new products.
"Private label growth in our savoury range is relatively small, so the private label impact is mainly in the frozen fruit business and our fruit pie business."
Company research showed consumers were more comfortable buying branded savoury pies ahead of private label products, even as they searched for better value.
He also said premium brands were unaffected by current weak trading conditions.
The trading update is based on management accounts to the end of May 2012 and sales for June 2012.
Patties Foods shares were two cents lower at $1.55 at the close of trade on Monday.