UK food group Northern Foods today posted a drop in full-year pre-tax profits, as pension costs overshadowed sales gains.

The ready meals maker posted pre-tax profits of GBP47.5m (US$75.5m) for the 12-month period ended 28 March, down from profits of GBP50.1m reported in fiscal 2007-8.

“On a pre-tax basis, the reason we have come down is we saw our pension financing credit reduce,” a spokesperson for the company told just-food.

Nevertheless, CEO Stefan Barden remained upbeat.

“Northern Foods has delivered a resilient performance this year, in challenging economic conditions. We have successfully adapted the business to the current retail environment, whilst continuing to invest to enhance the trading position of the group,” he commented.

The company posted a 4.6% increase in total revenue, which rose to GBP975.2m, while profits from operations rose 8.9 % to GBP52.7m.

Underlying EPS rose from 5.62 pence last year to 6.45 pence this year.

While Barden said that the coming year was likely to be “equally challenging” he added that Northern Foods’ “operational and financial strengths” position it to benefit when the market recovers.