Sandwiches and salads deliver for Northern Foods

NORTHERN Foods said it was trading “solidly” despite tough market conditions and expects to deliver full year operating profit in line with expectations.

The Leeds-based group, which produces food including Fox’s Biscuits and Matthew Walker Christmas puddings, highlighted sandwiches and salads and bakery goods as star performers.

And the firm promised a boost for its Goodfella’s frozen pizza range today after unveiling plans for new recipes and a TV-backed brand relaunch.

The multi-million pound campaign, which will begin next month, comes as Goodfella’s looks to close the gap on market leader Chicago Town.

Northern said its frozen foods division, which includes Goodfella’s, was now focused on achieving profitable sales growth after its recent decision to exit low margin business areas, such as supermarket own-label pies.

In an interim management statement covering the 14 weeks ending April 3 and the 53 weeks to the same date, chief executive Stefan Barden said: “Northern Foods continues to trade solidly, in tough market conditions, with strong trading in sandwiches and salads, and bakery.

“We will deliver full year operating profit in line with market expectations.
 
“We continue to invest for the future, with investment in our brands, our products and our factory capabilities. The substantial actions we are taking will drive shareholder value in the years ahead.”

Mr Barden said group like for like sales for the full year increased by 1% on the previous year, but group like for like sales for the fourth quarter were down 1.8% on the prior year, due to the planned exit from its low margin frozen business.

Fox’s Biscuits is now the number two biscuit brand with 10.7% market share but Northern’s ready meals division has been hit by tough trading conditions.

Earlier this month, Northern started a long term contract to supply British Airways on its short haul routes from London Heathrow, using a new dedicated facility with its partner DHL.

It also secured new sandwich business with Costa Coffee, which will start during the second quarter of its new financial year.
 
Northern added: “We are in discussions with a customer about our joint business plan at our Swansea factory, which may result in an impairment charge in this year’s financial statements. No assessment of the value of any provision can be made until the conclusion of these discussions.”