On the money: Northern eyes Goodfella's growth from relaunch
Barden is confident of growth in the frozen division
Northern Foods is hoping the relaunch of Goodfella’s pizza will help turn around an “unacceptable” performance in the last year, providing a platform for growth.
Shares in Northern fell this morning (1 June) after the company booked flat annual sales and earnings.
Revenues from Northern's frozen division were down 9.6%, reflecting the company's moves to cut low-margin business to boost earnings.
Profits from Northern's frozen business rose to GBP13.6m (US$19.7m) from GBP9.3m but chief executive Stefan Barden said its Goodfella's brand could have performed better.
“With Goodfella's, I have to say that we have not performed as I would like in the frozen pizza business. This is not acceptable and, for the last 12 months, we have been redesigning the portfolio,” chief executive Stefan Barden told analysts.
However, Northern is hoping a GBP5m relaunch of Goodfella's will give the brand a “platform for growth”.
“Consumers are now getting a new and better product, we have developed a new promotional programme and this has meant improved distribution points. We have high hopes for this. We've got more retailer space on the back of the launch and we know the adverts are going down well,” Barden said.
Northern said it rebuilt profits from its frozen business this year by reducing costs and eliminating low-margin business. The company closed its Poldys pizza manufacturing site last year.
“In frozen…we are investing to grow our market position. This is an attractive market, it’s promotional driven, and over the last 18 months we have been adapting our business model. As a result last year frozen SKUs were down, sales were down but profit is up, and this is a good platform for which to grow this year’s brand investment,” Barden said.
Elsewhere, Northern said it was "well positioned" after investment in new technology at its biscuits business and new contracts to provide meals for British Airways and sandwiches for Costa Coffee.
Shares in Northern were down 5.18% at 45.7p at 11:13 BST today.
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