LONDON, July 13 (Reuters) – British food manufacturer Northern Foods (NFDS.L) said sales fell in the first quarter of its fiscal year reflecting its decision to pull out of low margin contracts.
The company, which makes own-label products for retailers as diverse as premium food seller Marks & Spencer (MKS.L) and discounter Aldi, said on Tuesday comparable sales were down 1.6 percent in the quarter to July 3 compared with the year before.
Northern Foods, which is Britain’s biggest seller of Christmas puddings and supplies food to British Airways (BAY.L), stopped making Birds Eye frozen pies in June last year and closed a ready meals factory in Swansea in April this year after failing to agree a contract with J Sainsbury (SBRY.L).
The company, which also makes Goodfella’s pizza and Fox’s biscuits, said it expected trading conditions to remain challenging but is continuing to invest in its brands and technology in order to drive future earnings growth.
Shares in Northern Foods closed on Monday at 46.75 pence, valuing the business at 216 million pounds ($324 million). They have underperformed the UK food producers’ index .FTASX3570 by about 29 percent since the start of the year.
(Reporting by Matt Scuffham; Editing by Lorraine Turner)