Northern Foods to announce business review

The future of Fox’s Biscuits will become clearer today when owner Northern Foods announces a review of its business operations.

The Leeds-based company, which has more than 20,000 staff in the UK and Ireland, is expected to unveil a new strategy to deal with healthier eating trends and the disappointing performance of its chilled and bakery arms when it posts annual results today.

Northern makes Dalepak frozen foods and Goodfella’s pizzas, as well as Fox's biscuits and is the parent company of the Green Isle Food Group in Ireland

It is thought that Northern has been considering the sale of some of its businesses with speculation centred on Fox’s in recent days.

Northern has owned Fox’s for 29 years but the biscuit maker has been hit by intense competition, particularly from rival United Biscuits.

And although Northern may be reluctant to sell Fox’s, the need for change will be highlighted by today’s results which are likely to see group profits fall by 28%.

Northern, which supplies many major retailers, including Marks & Spencer, has already said profits will be in the region of £45m (€66m) for the 12 months to April 1 compared with £62.2m (€90.9m) a year earlier.

The falling profits will intensify the pressure on chief executive Pat O’Driscoll, who joined two years ago but has so far failed to shake off the company’s reputation as an underperformer.

Shares in Northern have fallen from 164p in January to a year-low of 88.75p last month amid profits warnings, although the performance of Goodfella’s is likely to provide some encouragement today.

Other candidates for disposal include transport division NFT while investors may face a significant cut in the size of their dividend.

Northern has only recently completed a restructuring after merging 15 former operating units into three divisions and shutting two plants.

It has blamed healthy eating habits such as those presented by celebrity chef and UK school dinners campaigner Jamie Oliver for the fall in business. It has also pointed to price cutting and intense competition, particularly in the biscuits arm.