UPDATE 3-Premier Foods profits as Britons shun meals out

* H1 trading profit 123.6 mln stg vs forecast 121-134 mln

* H1 turnover up 3.5 pct to 1.25 bln stg

* Key grocery brands, Hovis gaining market share

* On track to meet full-year expectations

* Shares rise 4 pct

(Adds CEO, analyst comments, shares, detail, background)

By Mark Potter

LONDON, Aug 5 (Reuters) - Premier Foods (PFD.L) met forecasts with a 6 percent rise in first-half profit on Wednesday, helped by market share gains for its Hovis bread and a growing trend among recession-hit Britons to eat at home.

Britain's biggest food maker said its strength in packaged groceries like Loyd Grossman sauces and Branston pickle was working in its favour as penny-pinching consumers look to cut back on waste and liven up their leftovers.

Promotions were up about 10 percent year-on-year, in line with rivals, as food makers battle to attract custom and Chief Executive Robert Schofield said trading conditions were likely to remain competitive.

"People talk about green shoots (of economic recovery). I'm not quite so sure. I can see the second half is going to be a pretty tough trading environment," he told reporters.

But he added this was being offset for Premier by market share gains, driven by advertising campaigns and successful new products launches like Branston Mayo with a Twist.

Premier, which also makes Mr Kipling cakes, Bisto gravy and Quorn meat substitute, said operating profit from continuing business before one-off items and goodwill was 123.6 million pounds ($209.4 million) in the six months to June 27. Forecasts ranged from 121 million to 134 million, according to a Reuters poll of four analysts.

Turnover climbed 3.5 percent to 1.25 billion pounds, helped by a 1.6 percentage point rise in market share in Premier's groceries business and a 3.6 percentage point rise for Hovis to 26.3 percent, its highest market share for two years.

At 0800 GMT, Premier's shares were up 4 percent at 41.6 pence, valuing the firm at just under 1 billion pounds.

"Good to see a set of numbers from Premier Foods on the right side of expectations, a first tentative step in trying to build investor confidence," Credit Suisse analysts said.

DEBTS

Premier Foods shares have lagged the UK food producers' index .FTASX3570 by around 50 percent over the past year, but have outperformed since March when the group eased some concerns over its debts by raising 379 million pounds in an equity fundraising and renegotiating its banking arrangements.

Net debt, ramped up when the firm bought rival RHM and parts of Campbell's, was 1.48 billion pounds, down from 1.8 billion pounds the year before, largely due to the fundraising.

Britain's retailers are struggling with a deep economic recession, but grocers are faring better than most as shoppers cut back on eating out.

A survey by business consultants Accenture last month found that 64 percent of Britons are eating at restaurants less often.

Premier, which also makes Hartley's jam and Angel Delight desserts, said it was on track to meet full-year underlying profit forecasts, which are pitched about 325 million pounds.

Including one-off items and interest payments on its debts, Premier made a first-half net loss of 35.9 million pounds. It did not pay a dividend. ($1=.5903 Pound) (Editing by James Davey, David Holmes and Simon Jessop)