Northern Foods has announced that profit before tax from operations during the 2006/07 interim period equalled GBP16.0m (US$30.37m), compared to GBP25.7m in the prior year period, in line with its expectations.
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The UK manufacturer said that its chilled division operational improvement and simplification was progressing well, and the group’s central cost reduction programme was on target.
Revenue from continuing operations during the first half of the year was GBP645.1m, down from GBP651.9m last year.
The manufacturer said that revenue from retained businesses was up 3.6%, while profits from these operations before exceptional items was GBP25.3m, compared to GBP25.8m in the prior year period.
Northern announced an interim dividend of 1.5 pence per share, down from 3.4 pence per share last year, in line with rebasing announced in May 2006.
The company has, however, reduced its net debt to GBP327.5m from GBP399.2m in the prior year period, which it said reflected strong cash and capital management.
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By GlobalDataIn terms of the company’s disposal plan, it said that remaining disposals were progressing in line with plans to achieve GBP200m total proceeds.
Strong brand performances were achieved by Goodfella’s pizza, Fox’s and Grassington’s, Northern Foods noted, while reporting a disappointing bakery division performance, impacted by highly competitive market, hot weather and speciality bread fire.
Northern Foods chief executive Pat O’Driscoll said: “2006/07 is a year of transition as we simplify and refocus the business around higher performing categories. Our improvement programmes are progressing to plan and our strong focus on cash generation will deliver significant incremental value. There is much still to do but I am encouraged by our initial progress.”
In its outlook, the company said that in the second half-year, it expects to see a continuation of the challenging trading conditions that have impacted parts of the business, particularly in biscuits and the disposal businesses. Also, results for the full year will depend upon performance in the seasonally busier second half-year, it said.
