Northern Foods: delivered «resilient performance»

Leeds / UK. (nf) Northern Foods PLC has delivered a resilient performance in 2008/2009, in challenging economic conditions. According to a press release the company has successfully adapted the business to the current retail environment, responding quickly to the recession with new value products and discount ranges alongside our core market and premium heartland. Its business with the discount retailers, or based around value products, is now around a fifth of the Group’s sales, Northern Foods said in its statement.

The Company has continued to drive performance improvements right across the Group, growing sales, exiting low margin business, investing in the future, improving operational efficiencies and ensuring that it is cash focused and cost conscious. Northern Foods remains focused on the key markets of Ready Meals; Sandwiches + Salads; Pizza; Biscuits and Puddings. This year also saw the Company secure a prestigious contract to serve British Airways. Summary:

Operating highlights

• Business successfully adapted to current retail environment; growth in discount sector and value products complementing our strength in the premium market.
• Strong performance in Chilled and Bakery, reflecting our superior product offering; Frozen division growth impacted by Euro strength.
• Significant commodity cost increases successfully recovered.

Financial highlights

• Good sales growth, increasing total revenue by 4,6 percent to 975,2 million GBP (2007/2008: 931,9 million GBP).
• Profit from operations up 8,9 percent at 52,7 million GBP (2007/2008: 48,4 million GBP), after 4,2 million GBP of incremental investment in the business.
• Profit before tax at 47,5 million GBP (2007/2008: 50,1 million GBP), reflecting a reduced pension credit.
• Profit for the period of 2,5 million GBP (2007/2008: 34,5 million GBP), after restructuring costs of 35,4 million GBP (2007/2008: 4,7 million GBP) and tax allowance changes.
• Underlying EPS of 0,0645 GBP per share (2007/2008: 0,0562 GBP).
• Proposed dividend maintained at 0,045 GBP per share (2007/2008: 0,045 GBP).
• Robust balance sheet with new Revolving Credit Facility (RCF) in place through to 2012; net debt 206,7 million GBP (2007/2008: 200,2 million GBP).

	2008/2009	2007/2008
Revenue	975,3 million GBP	931,9 million GBP
Profit from operations	52,7 million GBP	48,4 million GBP
Profit before taxation	47,5 million GBP	50,1 million GBP
Underlying PBT	39,0 million GBP	34,4 million GBP
Profit for the period	2,5 million GBP	34,5 million GBP
—		—
Operating margin *	5,4 percent	5,2 percent
Return on invested capital * (ROIC5)	11,7 percent	11,0 percent
Underlying earnings per share (EPS2)	0,0645 GBP	0,0562 GBP
Adjusted earnings per share (EPS6)	0,0776 GBP	0,788 GBP
Dividend per share (proposed)	0,0450 GBP	0,045 GBP

Chief Executive Stefan Barden: «Northern Foods has delivered a resilient performance this year, in challenging economic conditions. We have successfully adapted the business to the current retail environment, whilst continuing to invest to enhance the trading position of the Group. We have much more to do, but year by year we are making Northern Foods a stronger and more sustainable business. We anticipate that next year will be equally challenging, with the continuation of food inflation and competitive pressures. Our operational and financial strengths position us well to benefit when markets recover».

Info: Northern Foods – Full year results ending 28 March 2009 – Continuing resilient performance in challenging economic conditions (DOC, 18 pages, 252 KB).