Northern Foods profit rises 38%

Pizza production is one of five key markets for Northern Foods

Northern Foods, which makes Goodfella's pizzas and Fox's biscuits, has reported a 38% rise in half-year profits but warned of higher commodity costs.

Profit before tax jumped to £20.1m in the six months to 29 September.

The group said it had negotiated price rises with its retail customers for the next six months as raw material costs rose by up to 5% from a year ago.

But the firm added that the extent of the impact of the price rises on consumers and future sales was unclear.

'Degree of caution'

The markets in which we operate remain challenging Stefan Barden, Northern Foods chief executive Northern Foods share price

The company's chilled foods division, which makes sandwiches and salads for Marks & Spencer, increased its operating profit by 62%, boosting the whole group's results.

Northern Foods has sold non-core businesses and gone through a restructuring process.

It is now focused on five key markets - sandwiches and salads, ready meals, pizza, biscuits and Christmas puddings.

"The markets in which we operate remain challenging and we retain a degree of caution in light of the current pressure on the consumer," said chief executive Stefan Barden.

"However, we have strong management teams in place and are focused on opportunities to expand, grow and improve returns," he added.