Richmond Foods said the proposed closure of its ice cream factory in Devon could lead to the loss of 175 jobs.

The company, which is based in North Yorkshire, said it would consult employees about shutting down production at its plant in Ivybridge, near Plymouth.

The closure will take place next year as part of a strategy to cut operating costs, expand capacity and invest more in machinery.

Chief executive James Lambert said much of the machinery at the Devon factory, which was acquired from Associated British Foods, was more than 25 years old.

Production would be transferred to the group's other sites near Northallerton, in North Yorkshire, Leeds and Wigan, which have space for new machinery to be installed.

In an update on trading, Richmond said full-year profits were likely to be about £14m and that it had captured further market share.

This allayed fears that profitability had suffered from a price war in the supermarket sector and poor summer weather, leading analysts to upgrade their forecasts for the second time in as many weeks.

Investors have been nervous since consumer products company Unilever warned last week that profits would miss expectations because of weak sales of ice cream.