Northern Foods’ reaction to media reports suggesting its Fox’s Biscuits division could be sold was a refusal to comment on “press speculation”.
A company spokesperson told just-food today (25 April) that the food group would stay silent on the rumours, at least until releasing the conclusions of its strategic review at the end of May. “We have nothing to say until then.” She said.
The strategic review will examine Northern Foods’ business model, product portfolio and cost base following a disappointing financial fourth quarter.
The UK’s Daily Express newspaper reported that, with Fox’s Biscuits falling further behind its closest UK rival United Biscuits, the company’s board has discussed the matter in meetings this week.
However, the spokesperson noted such meetings are nothing unusual, and that the board congregates each month regardless.
A company announcement, on 13 March 2006, said that Northern Foods’ bakery division has been seriously affected by a downturn in the biscuit market. Biscuit sales in January and February were 12% lower than the previous year and the market continues to be heavily price promoted, the company said in a trading update. Its chilled division was also on the slide, as sales of pastry products in January and February fell 11% compared to last year.
Northern Foods expects a fall in profit for the current financial year, to GBP45m, compared to GBP62.2m last year, as a result of the sales downturn and reduced fourth quarter revenue.
The company posted “very disappointing” sales in the first two months of the fourth quarter, compared with a 3% growth in the first nine months of the year.
Yesterday (24 April), Dow Jones noted that Northern Foods shares were up 3.6% at GBP0.9475 following the media speculation.
