The UK’s Northern Foods, which makes chilled and frozen foods for UK retailers, has reported lower profits for the full year and said it had been a “difficult and disappointing” year for the company.

The company reported pre-tax profit before goodwill amortisation and exceptional items of £86.0m (US$157.9m) for the 53 weeks to 3 April 2004, down 11.8% year-on-year.

Sales rose 8.5% to £1.54bn, with underlying retail sales rising 3.5%. Operating profit before goodwill and exceptional items slipped 7.4% to £107.0m.

The company said its grocery unit posted a rise in continuing profit to £45.2m from £40.1m a year earlier, while its convenience unit posted a fall in continuing profit to £56.1m from £72.9m a year earlier.

Northern Foods said trading was in line with expectations in first seven weeks of the current financial year.

“The inherent strengths of Northern Foods remain substantial. These are vital in a market place where competition is becoming ever more intense, as reflected in the recent slowing of food sales reported by some of our largest customers,” said chairman Peter Blackburn.

“Although this has been a difficult and disappointing year for Northern Foods, and we recognise that much remains to be done, I am confident that we have begun to take the right actions to equip the business to compete in this most demanding climate,” he added.