UK-based Northern Foods has reported a 25% rise in full-year earnings, as it cut costs and negotiated price increases with retailers.
Northern Foods makes Goodfella's pizza and also supplies own-label prepared foods to supermarkets. Its pre-tax profits from continuing businesses were just over £50m, compared with £40m the year before. Revenue rose to £931.9m from £888.5m. The results were at the upper end of analysts' forecasts.
Northern Foods said it had passed on 'significant' commodity cost increases, especially in cereals, dairy, cocoa, and fats. Its operating margin was up 0.1 points on the previous year at 5.2% despite the higher commodity costs.
But Northern Foods warned that the current trading environment remained challenging. 'We're keeping a very close eye on fuel costs and they are a concern to us,' chief executive Stefan Barden told reporters.
Following the sale of several unprofitable businesses a year ago, Northern Foods is now focusing on ready meals, sandwiches, salads, pizza, biscuits, and Christmas puddings.
