CAKE firm Inter Link Foods is in talk with its bank after being hit by serious money troubles.

The Blackburn company, which employs about 500 at Shadsworth, saw its share price fall more than 50 per cent yesterday after it revealed it would make a bigger loss than expected.

The announcement came a month after it announced it would fail to make a profit.

Inter Link, which makes cake products for customers including Disney, announced last month that it would not meet market expectations for the previous 12 months, and instead make a loss.

And yesterday the company announced it will now make an even bigger loss than expected. A statement to the stock market said the firm "expects to make an operating loss before interest and incur higher than previously anticipated exceptional costs for the year to April 2007."

Inter Link has blamed competitive market conditions and reduction in sales for the situation, but has said that it "remains confident".

The firm has also had costs to bear from moving to central distribution and closing parts of the business.

So far no announcement has been made of how the workforce could be affected by the news.

A spokesman for the firm said: "Although margins and volumes are down on recent estimates, the board remains confident 2007/08 will be materially better than the current year.

"Due to the losses that have been incurred in recent months, borrowings are higher than previously anticipated. The company has been engaged in an open and constructive dialogue with its bank, which remains supportive whilst the company can demonstrate that the situation is improving."

Inter Link also said its Soreen brand was still on target for a successful year, but its "own label" business had suffered from competitive market conditions which it said had prevailed for the last 18 months.

Tony Hedley, of Hedley & Co stockbrokers, Blackburn, said: "I don't think this will be the end for Inter Link. They have got some very good products that are making money for them.

"But what the market doesn't like is repeated profit warnings that come out of the blue."

Inter Link says its production is at an acceptable level and it is winning business.

In February, company founder and executive chairman Alwyn Thompson announced he was retiring due to ill health.