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Northern Foods in radical U-turn
Northern Foods is selling off 40% of its business as part of a radical restructure of the troubled group.
Chief executive, Pat O'Driscoll announced the company would be radically refocused in a bid to reverse the fortunes of the group, which has suffered from lost contracts and slipping margins.
O'Driscal said the company had for too long been a yes company manufacturing food for supermarkets, even if it was not profitable. She said the business would take a tougher line on uneconomic business in future. About 75% of its sales are accounted for by five customers Marks & Spencer, Tesco, Sainsbury's, Asda and Morrisons.
The group will focus on five core businesses: pizzas, biscuits, ready meals, sandwiches and biscuit puddings. It will discard the operations that make Pork Farm pies and Marks & Spencer's 'melting middle' puddings.
Northern Foods hopes to raise about £200m from the sale and will put the proceeds towards reducing its debt and pensions deficit.
The group reported an adjusted full-year pre-tax profit of £45.1m, down 28%. The group also halved its dividend payout.
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