Profits dip at food giant

THE owner of Lancashire’s iconic Hollands Pies, has reported a 16% dip in profits.

Northern Foods, which is the biggest supplier of food to high street heavyweight Marks & Spencer said profit for the 26 weeks to September 27 fell to £16.9m from £20.1m reflecting the adverse effect of currency movements and increased investment in its brands.

However, profits were just above the City forecast of £16.5m.

Hollands, which is based in Baxenden near Accrington was founded in 1851. Around 400 people work at the factory, which produces more than 80 million pies, puddings and pastries every year.

Northern Foods, which is based in Leeds said group sales in the half year had risen by 6.8% to £468.6m. Average sales prices across the group were 5.6% higher, reflecting the manufacturer’s robust approach to recovering increases in commodity costs during the period.

The group said it was also planning to develop Northern Foods in areas “beyond its traditional channels”. It confirmed that it was actively pursuing a number of opportunities with £500,000 already invested in a number of projects.

Mothballing of its Fenland Foods factory in Grantham, Lincolnshire, which was completed in August, also resulted in a first half restructuring charge of around £25m, of which cash costs were approximately £6m.

Chief executive Stefan Barden said that the firm was making good progress despite tough conditions and that the past two years of restructuring had transformed it into a better balanced and more resilient business.

“We have successfully responded to the current economic environment by introducing value product ranges for our customers, including the discounters,” he said.

“Our traditional premium ranges continue to be successful and we have a good proposition across all market segments. In these market conditions, we remain focussed upon growing our brands, operational efficiency and maintaining our strong balance sheet.

“We remain confident of maintaining good progress throughout the balance of our financial year, while sharing the widely publicised uncertainty around consumer spending over the Christmas period.”

The board is maintaining the interim dividend at 1.55p per share.