In a trading statement, UK food group Northern Foods plc has warned that the group's profit before tax for the current year will be lower than last year.

Northern Foods brought forward its trading statement from its scheduled date as a result of its strong trading in its shares. The company's share price was reported to have fallen by 9% following the statement.

"We are engaged in a major transformation programme," the company said. "Whilst profitability has been impacted in the short-term by the factors indicated, we are confident that our continued focus on driving efficiency, cost price recovery and the restructuring of the chilled business will deliver our medium term goals."

The Leeds-based food maker, whose brands include Fox's biscuits and Goodfellas Pizza, said that while operating margins were broadly in line with the first half of the year, third-quarter profits would be lower than in the corresponding period as a result of higher costs, particularly for energy.

Higher promotional costs in biscuits had also hit margins, Northern Foods said. Some price increases had been secured in the third quarter, a trend continuing into the fourth quarter which the company said would result in improved margins. The company also said that underlying sales for continuing operations in the third quarter had risen by 3.0%, in line with growth in the first half of the year of 3.4%.

Northern Foods recorded a pre-tax profit of GBP62.2m in the year to the end of March 2005.