Northern reorganisation begins to pay off
1 min read
The bakery and biscuits manufacturer Northern Foods said today (9 November) that its chilled foods and bakery operations were continuing to deliver strong progress but that this was being offset by a weaker performance in its frozen food division where the market remained very competitive.
Last year's change programme in Northern's ready meals factories had been reflected in a stronger performance of this business in the first half of the year "Our transformation into a leaner and more competitive business continues, with increased investment in our brands and technology, and further actions being implemented to reduce our costs," the company announced as it unveiled its performance for the six months to 2 October.
A £26.5m capital investment in new automated technology across the Fox's Biscuits manufacturing sites, would provide competitive advantage and enhance future earnings.
Last month, Northern announced an organisational change to improve performance and reduce costs, moving from five business units to two divisions operating as centres of excellence – one division managing branded, manufacture to stock businesses and the other, the chilled own label, manufacture to order businesses.
Chief executive Stefan Barden (pictured) said: "Whilst trading conditions remain tough, we are taking decisive actions to ensure Northern Foods remains well placed for these competitive and uncertain market conditions. Our finances remain strong and we continue to trade in line with market expectations."
Sales for the period increased by 2.7% to £453m (H1 2009/10: £466.9m) and while profit from operations was £17.5m (H1 2009/10: £20.5m), Northern reported a loss for the period of £9.5m, (H1 2009/10: profit of £12.9m), reflecting a higher level of restructuring items, including an exercise to plug its pension scheme deficit.
