Northern Foods to invest £26.5m in Fox’s Biscuits

NORTHERN Foods is to invest £26.5m in automated technology at its Fox’s Biscuits factories to grow its market share. 

The Leeds-based group, which produces food including Goodfellas pizzas, Fox’s Biscuits and Matthew Walker Christmas puddings, said that around 200 jobs would be lost at its Batley, Kirkham and Uttoxeter sites as a result of the decision mainly through voluntary redundancy.

Northern Foods said that the technology would fix current “pinch-points” and help it move from three sites to two world class facilities to further enhance the competitive position of Fox’s Biscuits.

This project is expected to generate a return on investment in excess of 20%.

The manufacturer, which today announced a £15.3m rise in pre-tax profits for the six months ended September 26 to £7.2m from a loss of £8.1m, said that its third ‘Vinnie’ campaign had helped drive brand share to its highest level since 2006.

Total sales for the period were £466.9m compared to £468.6m, which reflected the mothballing of Fenland last year.

Northern Foods said that demand continued to be robust with like-for-like sales growing by 2% led by chilled and bakery.

The chilled division has seen strong sales growth driven by new discount lines in sandwiches and salads although this in turn has “dampened” margins.

The closure of its Hull ready meals site, which was announced in May, has impacted sales reflecting lower customer orders during the wind-down phase.

Northern Foods said that market conditions remained competitive but that the firm was entering the second half in a solid financial and operating position.

Stefan Barden, chief executive of Northern Foods, said: “Our business is stable, balanced, and benefiting from management actions taken to improve our performance.

“We have many opportunities to drive shareholder value over the coming years and today we are announcing a significant investment in Fox’s Biscuits, which will enhance its profitability and provide competitive advantage.”

He added: “Market conditions remain competitive but at this stage of the
year, our sales and profit expectations for the current financial year remain
unchanged, and in line with market expectations.”