Northern Foods maintains sales momentum

Northern Foods today reported a pick-up in sales but warned trading remained tough as it faced up to higher energy costs.

Northern, which makes Dalepak frozen foods, Goodfella’s pizzas and Fox’s biscuits and is the parent company of the Green Isle Food Group in Ireland, said in an update ahead of results for the six months to October 1 that underlying sales on continuing operations were around 3.4% higher than last time.

This compared with a 3.2% hike for the 13 weeks to July 2, although Northern added that surging input costs continued to hamper progress.

The Leeds-based firm, which has been hit by the higher price of energy and more expensive meat, added that profit margins should be broadly the same as last year.

The company began a shake-up in late 2003 to correct a string of disappointing financial results.

It has merged 15 former operating companies into three divisions and shut two plants, including one in Carlisle, as part of the overhaul launched by chief executive Pat O’Driscoll.

Ms O’Driscoll said: “As has been well-documented, the trading environment remains tough and we will need to recover further input cost inflation in the second half, particularly in utilities.”

However, she added: “I am encouraged by the good progress we are making to restructure and refocus the business towards our goals.”

Marks & Spencer accounts for about 30% of the firm’s business, with other major customers including Tesco, Asda, Sainsbury’s and Morrisons.