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Chilled convenience food group Uniq said 2008 would be a tough year and announced there would be no final dividend.

The UK-based group reported a profit before tax and significant items of £1.9 million compared with a loss of £21.9 million in the nine months to 31st December 2006.

A three per cent improvement in sales growth to £736.1 million, following a flat performance in 2006, plus the sale of French spreads business St Hubert, and its Belgian salads operation for £288 million, helped boost profits.

Uniq said a "significantly harsher" economic environment now means its recovery will take longer than originally envisaged, and is consequently not paying a final dividend.

Uniq chief executive Geoff Eaton, said: "Our progress in 2007 was delivered in the face of increasingly harsh economic circumstances, which have continued into 2008.

"The significant changes we have made over the last two years have equipped us better to deal with this tougher environment and to continue our recovery."

The group blamed unprecedented raw material inflation and a weak Christmas and New Year, overshadowed by doubts about consumer demand following the credit crunch, for its woes.

But the company added its largest customer, M&S, representing over 27 per cent of group sales, is undertaking a supplier review and Uniq has been selected as strategic partner in three major growth categories of 'food to go', fish/deli and premium desserts, which could have a significant impact on sales.