Shares in Mr Kipling owner RHM rose more than three per cent yesterday after the group issued a reassuring trading update.
RHM said that action to reverse the decline in demand for its cakes had resulted in a much stronger performance in the second half of the financial year.
The food producer launched a range of additive-free low-fat cakes in January in a bid to overcome plummeting sales as the UK trend towards health-ier eating continues.
A positive response to the Delightful range combined with "an excellent performance" in its bakeries division - driven by the strength of the Hovis brand - meant the firm expected operating profits for the year to April 29 to be above £170 million. This compared to £158 million the year before.
Chief executive Ian McMahon said: "At this early stage we are encouraged by the response to the actions we have taken to improve cakes' performance."
Mr Kipling has been making "exceedingly good cakes" since 1967 but the brand has suffered due to its oldfashioned image and the move against unhealthy products.
RHM, which is based in Marlow, Buckinghamshire, said annual turnover for the group was expected to be around two per cent ahead of last year.
The market share of Hovis had increased following the introduction of the Healthiest Ever Hovis - the latest phase of a programme to add whole-wheat and reduce salt across the Hovis range, the firm said.
The range was also boosted by the introduction of the UK's first crustless loaf Hovis Invisible Crust.
Advertising campaigns for Bisto and Sharwood's had also proved successful.