Profits Alert As Northern Foods’ Sales Crumble

By Tessa Thorniley, Daily Mail, London

Mar. 14–Northern Foods’ boss Pat O’Driscoll is feeling the heat in the kitchen after issuing the firm’s eighth profits warning in five years, wiping 17pc off the shares.

A triple whammy of crumbling biscuit, pastry and chilled food sales were behind yesterday’s shock alert to the City.

Analysts reckon Northern is left exposed to hungry private equity bidders. Alternatively O’Driscoll may have to consider a break-up as part of a business review she plans to report on in May. Northern’s struggling chilled foods arm could fetch up to £600m according to estimates.

It is the second business overhaul O’Driscoll has undertaken since she was brought in to revive Northern’s flagging fortunes in 2004.

Critics say her plans are floundering. “We would have been in an worse place now if we hadn’t made the initial changes,” she hit back.

Investors took little comfort, sending the shares down 22 1/4p to 107 3/4p — a five year low.

Northern’s £150m pensions deficit could prove hard to swallow for potential buyers. Net debt stands at £360m.

The Fox’s Biscuit maker said biscuit sales fell 12pc in the last quarter, compared with a 3pc overall dip in the market. Accordingly full-year pretax profits will be just £45m, against £62m the previous year.

“Aggressive promotions and pricing by our competitors is hurting,” O’Driscoll said.

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