The average company within the UK food and drink sector saw sales of £147.2m in 2001, having risen steadily by12.6% from £130.7m in 1999, while pre-tax profits also grew at 13.6%, according to a report out this month by financial analysts The Prospect Shop.

Pre-tax profit margins in the sector rose from 7.6% in 1999 to 8.8% in 2000, only then to fall back down to 1999 levels again in 2001.

The report also reveals that total assets for the food and drink sector increased as well, but the average number of employees decreased, "perhaps a sign of continuing automation and further technological advances," the report concludes.

It continued: "Overall, though, the food and drinks sector has witnessed a reasonably stable financial period, although rising debt levels do need addressing in the near future."

The total debt to net worth ratio for the sector as a whole jumped from 174% in 1999 o 239.4% in 2001. Of all the industries in the sector, alcoholic beverage companies recorded the highest debt levels with 262.2%.

Compared to the average UK company - dubbed UK plc by the Prospect Shop - Food and drinks companies witnessed sales growth just below the average, which was 19.4%, but experienced profit growth which was much healthier than an average negative growth of 22.9%.