Northern Foods: Chilled food boosts business

Leeds / UK. (nf) British food manufacturer Northern Foods PLC warned consumers that they had yet to see the full effects of the strongest food inflation for 14 years despite a string of price increases across supermarkets in the past month. Stefan Barden, CEO of the Goodfellas pizza-to-Fox´s biscuits group, said that many retailers were waiting until the new year before hitting shoppers with the bulk of unprecendented cost increases.

Northern Foods´ costs will be 40 million GBP higher this year given a 100 percent rise in key ingredients such as wheat, cocoa and dairy products, Barden told at the presentation of the half year results for the 26 weeks ended 29 September in Leeds. Financial highlights:

• Profit before tax up 37.7 percent at 20,1 million GBP
• Profit from operations up 5,9 percent to 26,8 million GBP
• Operating margin improved by 20 basis points to 6,1 percent
• Underlying revenue up 2,7 percent
• Net debt reduced by 33,3 percent to 218,5 million GBP

Northern Foods has spent this year restructuring its business in a bid to focus on five categories: ready_meals, sandwiches and salads, pizza, biscuits and Christmas puddings. Rising ready meals sales boosted revenue from Northern Foods´ chilled division, which saw sales rise 5,4 percent. «These results show that we are making continued progress in delivering the improvements which we set out in our strategy», said Stefan Barden (news release).