Northern Foods says tough trading conditions in convenience foods has damaged first-half profits.
The group said today that hot weather, high raw material prices and the loss of a £25 million sterling contract with supermarket Sainsbury had affected its convenience foods business, which supplies own-label ready-made meals, pies and quiches to some of Britain's biggest food retailers.
At 11 a.m. Northern Foods shares were down 14.8 per cent at 136-1/4 pence, the biggest drop among London's mid-cap stocks.
Northern Foods, which makes Fox's biscuits and Goodfella's pizzas, said recent hot weather had hit European crops, driving up its raw materials costs, while denting sales of convenience foods.
Convenience foods and ready-to-eat meals fell in popularity during the record breaking temperatures set this summer. As a result, profit before tax, goodwill and exceptional items would be "significantly lower" in the six months to September 30th compared with the same period of last year, the firm said in a trading update.
Northern Foods said it would shift away from its tradition of decentralisation in a bid to cut costs and expected second-half profits to be around last year's levels.
It declined to say whether there would be any further job cuts on top of the 150 announced in May, adding that it would consider selling parts of its business.