Share Price
12 Mar 2010
Delayed by 15 minutes

57.20p 0.00p

Financial Information

This section provides the half year results ending 26 September 2009 from Northern Foods as reported on 10 November 2009.

Trading well - investing for growth

• Like-for-like sales^# growth up 2.9%, led by strong growth in Chilled and Bakery
• Total sales of £466.9 million (H1 2008/09: £468.6m), reflecting mothballing of Fenland last year
• Profit from operations^* up 2.0% at £20.5 million (H1 2008/09: £20.1m), as we invested heavily in our brands and businesses this year
• Underlying profit before tax¹ in line with prior year at £12.9 million (H1 2008/09: £12.7m)
• Profit for the period² increased to £12.9 million (H1 2008/09: loss of £17.1m); reflecting much lower restructuring costs and a one-off tax charge in the prior period
• Underlying EPS³ up at 2.14 pence per share (H1 2008/09: 2.08p); interim dividend maintained at 1.55 pence per share (H1 2008/09: 1.55p)
• Strong balance sheet with committed facilities in place; net debt⁴ reduced by 10.0% to £222.2 million (H1 2008/09: £246.8m); approximately 64% of Group debt is at fixed rates

Operating overview

• Trading well in a competitive environment; benefiting from a stable, balanced business
• Continued strong performance in Bakery; good margin progression in Frozen with profits^* up 37.8%
• Strong sales performance in Chilled, but lower margins from reduced Ready Meals profits^*; management action in place to improve returns
• Successful investment in brands to support future growth
• Investment of £26.5 million announced today to enhance competitive position of Fox's Biscuits

Stefan Barden, Chief Executive of Northern Foods, said: "Our business is stable, balanced, and benefiting from management actions taken to improve our performance. We have many opportunities to drive shareholder value over the coming years and today we are announcing a significant investment in Fox's Biscuits, which will enhance its profitability and provide competitive advantage.

"Market conditions remain competitive but at this stage of the year, our sales and profit expectations for the current financial year remain unchanged, and in line with market expectations."

Chilled
Underlying revenue up^# 8.8% to £240.3m (2008/09: £220.9m)
Profit from operations^* down 27.3% to £7.2m (2008/09: £9.9m)

Frozen
Underlying revenue^# down 7.5% to 125.2m (2008/09: £135.4m)
Profit from operations^* up 37.8% to £5.1m (2008/09: £3.7m)

Bakery
Underlying revenue^# up 3.9% to £101.4m (2008/09: £97.6m)
Profit from operations^* up 26.2% to £8.2m (2008/09 £6.5m)

Notes
^# Like for like sales is underlying revenue which excludes the impact of currency rate changes and product categories no longer manufactured.

^* Results are stated before restructuring items. 'Restructuring items' which relate to significant restructuring events are presented as a separate column within their relevant Condensed consolidated income statement category. Presentation of these items in a separate column helps to provide a better indication of the Group's underlying business performance. 'Restructuring items' includes costs or income associated with the restructuring of businesses and gains or losses on the disposal or closure of businesses.

¹ Underlying profit before tax is Group profit before tax, before restructuring items and net pension financing. This is reconciled to profit before tax in the financial statements.

² Profit for the period includes restructuring costs after tax of £2.4m (H1 2008/09: £18.0m), adverse net pension financing of £6.7m and one-off tax items.

³ Underlying EPS is earnings per share before restructuring items, movement on deferred tax due to change in legislation, one-off release of prior year tax liability and net pension financing, net of tax. This is reconciled to earnings per share in the financial statements.

⁴ Net debt is defined as total borrowings (including both short-term and long-term bank loans, bonds, loan notes and finance leases) less cash and cash equivalents and short-term investments. Net debt will also include the proportion of the fair value of the currency swaps hedging the balance sheet value of the Group's dollar denominated loan notes.

⁵ EBITDA is earnings before interest, tax, depreciation and amortisation. It is calculated as profit from operations plus depreciation and amortisation, all measured before restructuring items.

⁶ Pre-restructuring free cash flow is net cash from operating activities, less net capital expenditure, plus interest received. Net capital expenditure is purchase of property, plant and equipment (PPE) less grants received and proceeds from sale of PPE.