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Northern Foods on Target

28 October 2010

UK - British food processing company Norther Foods announced that it continues to trade in line with expectations.

The company said it is taking decisive actions to ensure that it is well positioned for the competitive market conditions in which it is operating and it is positioning for growth.

Chilled grew like for like sales by 16.4 per cent in the second quarter, up by 14.3 per cent on the first quarter of the year, driven by Ready Meals, where actions to enhance factory efficiencies and focus operations around the large scale sites position the company well ahead of the main autumn and winter selling period.

Sandwiches & Salads saw a continuing strong performance, driven by new product lines for existing customers and new business wins, including British Airways and Costa Coffee.

Frozen’s like for like sales fell by 24.9 per cent reduced markedly in Q2 down 16.2 per cent. Operational initiatives and the relaunch of the Goodfella’s pizza brand has seen market share increase from 16.3 per cent in May 2010 to 21.1 per cent in September 2010. Performance is in line with our full year forecast, although the market remains very competitive.

Bakery grew like for like sales by 10.9 per cent in Q2 (down 5.6 per cent in Q1), giving a total increase of 3.3 per cent for the first half.

The company has announced a new organisational structure to manage the business through two divisions: Branded and Chilled. The Branded division will comprise Goodfella’s Pizza, McDougalls and Holland’s Pies, Fox’s Biscuits and Matthew Walker Puddings. The Chilled division will combine Sandwiches and Salads with Ready Meals and our British Airways supply business.

This new structure is designed to streamline the business, focus management expertise and drive performance improvements and cost savings which will pay back by the end of 2011.

The associated restructuring charge of up to £6 milion will be taken in the second half of this financial year.

The company said its financial position remains strong.

Stefan Barden, Chief Executive of Northern Foods, said: "We are taking decisive actions to ensure that we are well positioned for the competitive market conditions which we are experiencing and expect to continue.

“Our finances remain strong and we continue to trade in line with expectations.”

TheMeatSite News Desk

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