(RTTNews) - Branded and own-label food producer Northern Foods plc (NFDS.L:
News ) reported Tuesday a 2.9% growth in underlying revenue for the first half of the year ended September 26, 2009, helped by a 2.5% increase in volumes. The company noted that results for the first half will be consistent with management expectations, and expects to announce them on November 10.
Northern Foods' like-for-like sales for the 26-week period grew 2.9%, as volumes rose 2.5%. Total sales was flat from last year, reflecting the closure of the group's Italian-cuisine ready meals making unit, Fenland Foods, and a decline in Hull volumes.
Underlying revenue in Chilled business went up 8.8%, driven by new discount lines in Sandwiches and Salads. The company said that reduced promotions, lower volumes and project investment to support future growth of Ready Meals business affected the half-yearly results. Further, the loss of the anchor contract at the group's Hull ready meals facility, will result in its closure by the end of October after a rundown period.
Underlying revenue from Bakery business grew 3.9%, helped by brand investment in Fox's that supported the group's third "Vinnie" TV and online advertising campaign, resulting in Fox's brand securing its highest brand share since 2006.
Frozen segment's underlying revenue dipped 7.5% year-over-year, due to the company's rationalisation program to support stronger margins in the division. The company shut down its pizza manufacturing site at Poldys in Ireland last year, relinquished many marginal own label contracts and also terminated the Birds Eye co-pack agreement for supplying individual frozen pies.
Stefan Barden, Chief Executive of Northern Foods, said, "We continue to invest in our brands and businesses and we have a range of opportunities to drive shareholder value in the coming years. As usual, group sales and profits are weighted to the second half of our financial year."
Barden added that presently the group expects to report second-half results in line with market expectations.
NFDS.L is currently trading at 70.43 pence, down 0.82 pence or 1.15%, on the LSE.
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by RTT Staff Writer
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