Northern Foods, makers of Fox’s biscuits and Goodfella’s pizza, announced today pre-tax profits of £50.1 million for the last year, up 25% from £40 million the year before.
The company, which also supplies ready meals for Marks & Spencer, Asda and Sainsbury, has taken a range of cost-cutting measures over the last year which included closing unprofitable plants and narrowing its focus to key products. The company said it will continue “eliminating low margin business and driving efficiency.”
Negotiating higher prices with retailers, at an average of 2.8 per cent has also proved successful, while adopting a “strong performance culture” among its 11,000 staff allowed the company to increase personal accountability and save money by cutting management tiers, Northern Foods said.
Group earnings per share were up to 7.08p from 4.60p and revenue increased to £931.9 million from £888.5 million. Despite the results however, chief executive, Stefan Barden, warned that current market conditions remained a threat to the company. He said: “We don’t expect cost pressure to ease during this year. We’re keeping a very close eye on fuel costs and they are a concern to us.”
The company revealed that they are to attempt to strengthen their advantage further with a bolt-on acquisition strategy which will see it purchasing smaller competitors who do not survive the current credit crunch. It plans to invest both in the food industry and other growth areas.
Barden also said that the company would be focussing on quality customer retention and low-cost operating models. Of last year he said: “Our performance in biscuits was particularly pleasing.”