Northern says trading in line after 'solid' Christmas

The Leeds-based food manufacturer, which makes products ranging from Goodfella's pizzas to Fox's biscuits, said despite a "solid" Christmas period, sales for the 13 weeks to the end of December were flat.

However, the group said its sales and profit hopes for the year remain unchanged and in line with market expectations.

Northern said it quit the frozen pastry contracts to boost margins - in line with chief executive Stefan Barden's tough stance on exiting unprofitable or marginal contracts. This drove underlying sales in its frozen arm down 10.5 per cent, but the group is investing in its McDougall's pie brand, which it hopes should add to profitability.

Strong performance in biscuits helped the group's bakery arm grow underlying revenue by 1.4 per cent. A TV, radio and online campaign for its Rocky biscuits helped maintain momentum for Fox's, it added. However, it has faced increase competition in puddings, which hit sales.

Nothern's chlled foods arm grew revenues 5.4 per cent with strong growth in sandwiches and salads. However, the division's profitability has been hit by the closure of a ready meals plant in Hull.

"Our investment this year in new systems and change programmes will strengthen our future operating position in this attractive market," Northern said.

The group added it has reduced net debt by 17 per cent on a year ago.

Chief executive Stefan Barden said: "Northern Foods has delivered a resilient Christmas trading performance.

"Market conditions remain competitive but at this stage of the year, our sales and profit expectations for the current financial year remain unchanged and in line with market expectations. With a strong balance sheet, we are well placed going forward."