Continuing a trend seen throughout the year Northern Foods has witnessed a slowdown in sales growth in the fourth quarter. However, the maker of Fox's biscuits and Goodfella's pizza said that profits for the year would come in on target.

In a trading update released today (27 March) Northern said underlying sales from continuing operations increased by 2.6%. while year-to-date underlying sales were up 3.1%. Sales growth has slowed throughout the year: Northern reported its best performance in the first quarter, when it posted a 5.8% rise in comparable sales.

Northern saw its strongest sales growth in its chilled division, where revenues increased 4.5% in the quarter and 7.2% in the year. The group's frozen foods business posted a 2.4% sales increase in the quarter, while Northern said its performance in the seasonally strong ready meals category had been encouraging. Although its sandwiches and salads business saw continued growth, Northern said that sales had increased at a slower rate during the period.

Underlying sales in the bakery division declined by 2.6% in the fourth quarter and 4.6% in the fiscal. The company said that despite this decline, its share of the highly competitive biscuit market remained stable.

Northern Foods chief executive Stefan Barden, who took over from Pat O'Driscoll last month, said that the year had been one of transition for the food group. Northern has said that it intends to focus on value added branded goods. The group recently sold its speciality bread, chilled pastry, cakes and flour milling divisions, which had accounted for 40% of sales.

"The group has been successfully refocused and we enter the new financial year with a sound balance sheet and good opportunities to grow in our chosen markets," Barden said. "We will continue to focus on improving operational performance and in ensuring that we maintain the momentum we have developed in our chilled division."

Northern confirmed that full year operating margins will come in slightly behind the previous year, reflecting the weakness in certain frozen lines.

Northern Foods is due to report results for the year to end March on 30 May.