First-quarter sales fall at Northern Foods

by Eric Schroeder
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LONDON — Northern Foods P.L.C. said first-quarter like-for-like sales fell 1.6%, reflecting a sharp decline in frozen foods following the company’s exit of marginal businesses and the Birds Eye co-pack business.

“We are focused on a range of initiatives to enhance the competitive position of the group and to drive growth, with increased investment in brands, talent and technology in the first half year,” said Stefan Barden, chief executive officer. “With a strong financial position, Northern Foods remains well positioned going forward.”

The company’s bakery division in the quarter ended July 3 suffered an underlying revenue decline of 6%, reflecting the company’s decision to reduce promotional activity during the World Cup, but margins remained strong.

“Our major investment in new automated technology within Fox’s Biscuits is progressing well and this program is expected to complete early in our 2011-12 financial year,” Northern Foods said.

Frozen underlying revenue plummeted 25% due to the exiting of several businesses and the transition to the new Goodfella’s pizza brand. Northern Foods added that it’s continuing to roll out the McDougalls pie brand.

Meanwhile, in the chilled division, underlying sales grew 14%, driven by continuing strong performance in sandwiches and salads. The phased introduction of the company’s 10-year contract to supply British Airways began in March and is now fully operational.

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