Heavy automation programme to cost biscuit factory jobs

Announcing small increases in half year sales and profits today (10 November) the pizza to Christmas puddings giant said its investment in automated technology across Fox's Biscuits would drive earnings growth, support higher margins and generate greater operational efficiencies. Starting today and due to be completed in the first quarter of the 2011/12 financial year, the investment will introduce new automated technology at each of Fox's Batley, Kirkham and Uttoxeter sites, resulting in the loss of around 220 employees, mainly, the company said, through voluntary redundancy. The project is expected to generate a return on investment of more than 20%. Northern said its objective was to convert the current three sites to two world class facilities, which would further enhance the competitive position of Fox's Biscuits. In the 26 weeks to the end September total sales were worth £466.9 million (H1 2008/09: £468.6m) wile underlying pre-tax profit for the period came in at £12.9 million (H1 2008/09: £12.7m). Elsewhere in the group, a rationalisation programme in the pizza business drove up margins and profitability; bakery performance remained strong and a marketing investment for the puddings division supported plans to retain market leadership. In chilled foods, strong sales growth was driven mainly by new discount lines in sandwiches and salads, which had dampened margins. Northern chief executive Stefan Barden (pictured) said: "Our business is stable, balanced, and benefiting from management actions taken to improve our performance. We have many opportunities to drive shareholder value over the coming years and today we are announcing a significant investment in Fox's Biscuits, which will enhance its profitability and provide competitive advantage. 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."