Leeds / UK. (nf) Northern Foods PLC is on track to meet its profits targets after posting a «Trading update and pre-close statement» covering the 13 weeks ending 28 March 2009 (fourth quarter) and 52 weeks to the same date (full year) based on its management accounts to date. The Group will report its full year financial results in the End of May 2009. Highlights:
- Group underlying sales for the fourth quarter increased by 8,8 percent on the prior year quarter.
- Group underlying sales for the full year grew 4,7 percent.
- Group trading performance has remained robust in a challenging environment.
- Full year profit before tax will be in line with market expectations.
Group underlying sales for the full year grew by 4,7 percent, reflecting price increases of 4,4 percent and flat volumes. Definition: «Sales» excludes the impact of currency rate changes, product categories no longer manufactured, acquisitions and discontinued operations, including Fenland.
Chilled Food: Fourth quarter underlying revenue for Chilled was 12,2 percent ahead of the comparable period. Full year chilled underlying sales grew by 5,5 percent, with continued progress in Ready Meals over the winter period, driven by strong repeat purchase rates. The division continues to respond well to the recession, with further value ranges, including chilled pizza and discount sandwiches, launched during the period. We continue to work closely with our main customers on both premium and value propositions, as well as securing business with the traditional discounters. Our Grimsby chilled soup site has also performed satisfactorily in its first full year.
Bakery: Fourth quarter underlying revenue for the Bakery division grew by 10,4 percent. The division built on its solid performance over the Christmas trading period. Full year underlying revenue was up 5,5 percent, driven by both price and volume. Fox´s brand continues to build on the benefits from the «Vinnie» TV advertising campaign which ran on radio and TV to the end of 2008. The Group is also continuing with the evaluation of an investment in a world class Biscuits manufacturing facility.
Chilled Food: Fourth quarter underlying revenue for Frozen Food was up 2,2 percent on lower volumes. Frozen division performance, before currency, was solid, with full year underlying revenue, slightly up year on year, at 2,5 percent. Commodity cost inflation was fully recovered, with volumes lower, partly reflecting the exit of some marginal own label contracts in pastry and pizza. The improvement plan for Frozen continues. The re-launch of San Marco pizza and McDougall´s frozen pies during the period will build on the Group´s proposition to target the cash conscious consumer.
Northern Foods´ balance sheet remains strong. The US Private Placement loan notes continue to provide fixed rate financing for two-thirds of the Group´s debt through to 2012-2017. In addition, the Group is announcing that it has established new banking facilities of 250 million GBP to July 2012 which will replace the existing 460 million GBP Revolving Credit Facility.
Stefan Barden, Chief Executive of Northern Foods: «In a tough market, Northern Foods is trading strongly and we anticipate that our full year profit before tax will be in line with market expectations. We have adapted the business successfully to the new retail environment and we are benefiting from our operational and financial strengths. We are well positioned to continue our good progress».
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