The Leeds-based group, which makes ready meals and sandwiches for big high street names such as Marks & Spencer, Tesco, Asda, Sainsbury's and Morrisons, said pre-tax profits for the 12 months to March 29 should be comfortably ahead of average market forecasts of £47.5m.

The range of forecasts is from £45m to £52.3m and the group made a profit of £40m in 2007.

"In a downturn, food is fairly recession proof," chief executive Stefan Barden said.

"People who have to tighten their disposable income stop eating out and buy more comfort food to eat at home."

Despite the rumoured supermarket squeeze on suppliers, Mr Barden said that Northern had managed to pass on rising commodity prices to customers.

Northern serves the upmarket and mass market sectors rather than the cheap, value end and its market strength means that it has managed to pass on the increases.

"We are making the best-selling lasagne and shepherds pie and if customers don't like it we'll go down the road and sell our products to someone else," Mr Barden said.

The cost of raw ingredients has shot up over the past year particularly wheat, dairy, oils, fats and chocolate. In addition to these increases, the group has had to cope with rising energy costs which have hit the cost of baking and cooking.

Northern is fairly resilient to the vagaries of the weather as if it is warm, salads sell well and if there is a cold snap its ready meals pick up.

The group said that fourth-quarter underlying revenue increased by 3.9 per cent from a year earlier on flat volumes.

Following the sale of unprofitable businesses a year ago, Northern Foods now focuses on ready meals, sandwiches, salads, pizza, including the Goodfella's brand, biscuits, including the Fox's brand and Christmas puddings.

The group said it will continue to ditch low-margin activities in favour of high-growth businesses.

Northern is market leader with a 19.4 per cent share of the chilled ready meals market, yet it accounted for 47 per cent of the growth.

"We are focusing on products that sell better than our rivals' and we are gaining market share," Mr Barden said.

The chilled business continued to grow strongly, with fourth-quarter underlying revenue up 5.5 per cent. Volumes grew by 3.4 per cent, with sandwich and salads volumes well ahead.

The frozen division's underlying revenue grew 2.8 per cent in the fourth quarter and the bakery division showed encouraging signs of recovery, with fourth quarter underlying revenue up 1.1 per cent. The group has eliminated low value products and exited some unprofitable private label contracts.

With factories working at full capacity, Mr Barden said the group could afford to turn down less profitable business.

The group declined to comment on the review of suppliers currently being carried out by Marks & Spencer, but said it had good relationships with all its customers.

The group is transferring soup production to the new Grimsby site following the acquisition of the Baxters chilled soup manufacturing plant in the town.

Northern needs the extra factory space in order to meet increasing demands for its soups, one of the group's key product categories.

Its shares closed the day up eight per cent at 93.75p.