Northern Foods resilent amid tough market conditions

Leeds, UK - Northern Foods has delivered a "resilient performance" in difficult economic conditions and expects next year to be equally challenging, its chief executive Stefan Barden said in an announcement of the group's full year results for the 12 months ending 28 March.

The company posted a 9% increase in operating profits to £53 million, on sales up almost 5% to £975 million over the prior year. Profit for the period includes restructuring costs of £35.4 million – including £22.9 million for  mothballing its Fenland facility and a tax charge of £12.5 million following the withdrawal of Industrial Buildings Allowances

“We have successfully adapted the business to the current retail environment, whilst continuing to invest to enhance the trading position of the group," said Barden. "We have much more to do, but year by year we are making Northern Foods a stronger and more sustainable business."

Challenging during the year, included a 12% hike in material costs,  while energy costs were about 64% higher, Barden commenting: "We, and other manufacturers, see continued inflation looking ahead, with many key commodity prices still up year on year. We continued to recover higher input costs fully through the year."

During the last 12 months, Northern Foods completed the integration of the prior-year acquisitions - Ethnic Cuisine; chilled soup at Grimsby; and McDougalls frozen pastry. It also reduced its cost base across the divisions and advanced plans to invest in a major new biscuits factory.

Looking forward, Barden said the company will continue to exit low-margin business, invest in the future and improve operational efficiencies.  The focus, he added, will remain on the key markets of ready meals, sandwiches & salads, pizza, biscuits and puddings.