Recovery on menu at Northern Foods

Northern Foods, the owner of the Goodfella's pizza and Fox's biscuits, yesterday confirmed market hopes of a turnaround after a difficult year, declaring profits before tax and exceptionals of £86m for the 12 months to 3 April, in line with analysts' expectations.

Northern Foods, the owner of the Goodfella's pizza and Fox's biscuits, yesterday confirmed market hopes of a turnaround after a difficult year, declaring profits before tax and exceptionals of £86m for the 12 months to 3 April, in line with analysts' expectations.

Northern, a major supplier to Marks & Spencer, has issued three profits warnings in the past two years, the last of which - in September - led to the departure of its chief executive Jo Stewart.

Yesterday's figures, however, revealed a 28 per cent increase in its second-half profits, and the confirmation of a turnaround. Shares in the company rose more than 2 per cent to 155p, valuing the company at £780m. They are now up more than 40 per cent from last year's lows of 109p.

Patricia O'Driscoll, the company's new chief executive, who took the position in March, said the company would now embark on a radical restructuring, separating the group into three divisions: chilled, ambient and frozen foods.

Since her arrival at the group, Ms O'Driscoll has already made one non-core disposal, selling the Emile Tissot frozen food service to Dawn Fresh Foods last month.

Peter Blackburn, the chairman, said he was optimistic about prospects for the business going forward. "Over recent months, we have put the business on a sounder footing, with a focus on core strengths and the start of a number of structural cost saving initiatives," he said. "Although this has been a difficult and disappointing year for Northern Foods, and we recognise much remains to be done, by the time our new chief executive joined us ... we had moved towards creating a more solid platform for her to develop."

Further uncertainty has faced the company in recent weeks after news of a bid for M&S, from retail entrepreneur Philip Green, which if successful could leave its supply contract in doubt.

However, Numis Securities upgraded its recommendation on the company from a sell to hold, saying it was confident the company was on the road to recovery.