Northern Foods has slashed its dividend and hoisted a "for sale" sign above assets generating 40 per cent of revenues as Pat O'Driscoll, chief executive, unveiled a long-awaited strategic review aimed at turning round the food supplier.
The plan to shrink the business, which owns the Goodfella's pizza and Fox's biscuits brands, came two years after Ms O'Driscoll's appointment, during which time she has issued three profit warnings. Ms O'Driscoll said she had the full support of the board for the new strategy.
"Had I not made the changes that have been under way over the last two years, things would have been much, much tougher," she said.
"Northern Foods is a big and complex business, operating in a very dynamic marketplace. It would be foolhardy of me not to recognise that and adapt the strategy."
The businesses earmarked for disposal have combined sales of £580 million (€846 million) and include NFT food distribution, Smiths flour milling, and cakes and speciality breads. Chilled pastries, which includes Melton Mowbray pork pies, would also be sold.
Northern Foods' Irish frozen food producer, Green Isle, which makes Goodfella's Pizza, said it would be "unaffected" by the proposed sale.The group had already received tentative approaches and expected total proceeds of about £200 million. However, it said the disposal portfolio would continue to affect trading performance and further investment and restructuring were both required.
The first half of the current year would therefore be weaker than the comparable period last year. Pretax losses in the year to March 31st were £16.1 million.
