Northern Foods holds fire on new acquisitions … for now

Grocer, March 29, 2008

Northern Foods plans to hold off on new acquisitions in the short term as it beds in recent purchases.

Speaking at its fourth-quarter trading update, chief executive Stefan Barden said: "We need to digest what we've got and we'll be back on the acquisition trail in six to 12 months."

The integration of ready meals supplier Ethnic Cuisine was progressing "very well" on the back of a good Chinese New Year, he said. He reiterated the company's commitment to its Danepak meat grills business, which suffered in last year's wet summer.

The benefits of the addition of the George Foreman's Lean Mean Grillers brand would be seen this barbecue season, he predicted.

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Barden added that he was satisfied with the performance of the recently relaunched Fox's biscuit brand and that the company would "focus on getting the core of the brand working" before considering any brand extensions. When it did hit the acquisition trail again, it would look to grow in any market with growth rates above 5% he said.

Full-year group underlying revenue rose 3.2% and fourth-quarter underlying revenue rose 3.9%. Group pre-tax profit would be ahead of market expecations, it added. Analysts have forecast profit of 45m [pounds sterling] to 52.3m [pounds sterling].

Increased commodity costs had been mitigated, Barden said. "We recovered all price increases to see us through to the next harvest," he said. "At that time we will have to take a view. Whatever happens to us will happen to everyone in the industry."