Northern results rally as 1,000 suppliers are given the chop

Northern Foods, which has culled 1,000 suppliers over the last six months, has confirmed that it does not see its distribution arm NFT staying in its portfolio long term.

Speaking as the company posted a 5.8% year-on-year rise in pre-tax profit to £25.7m in the first half on sales up 3.4% at £700m on continuing operations, chief executive Pat O'Driscoll said: "Our ambition is ?to be the supplier of choice in ?added-value convenience foods. ?A logistics business doesn't really fit in with that."

Supplier rationalisation was continuing apace.

"We are working more intensively and more collaboratively with fewer suppliers and talking to them about how to benefit from understanding our business better," said O'Driscoll.

A company-wide war on waste had also generated significant savings, she added.

"We've been homing in on a raft of trouble spots from change-over times on ready meals, which were too long, to reducing butter cream waste in cake toppings. We were throwing away something like 33% of this at one site.

"Just by refusing to accept it, finding out why it was being thrown away, and addressing it head on, we were able to cut waste to zero in ?eight weeks. We're also looking at ways to reduce effluent costs in our pizza facility through separating waste streams and using different ingredients," she said.

"Every week [group supply chain director] Bob Spooner has a conference call with factory general managers and identifies the best and worst performers on things like waste. Nobody wants to be at the bottom of Bob's table!"

While the firm's bakery division reported a 9% rise in first-half profit to £19.7m on sales of £214.6m and profit at the frozen division was up 8% at £10.5m on sales of £115.7m, profit in the chilled division was flat at £8.8m on sales of £369.7m.

"Addressing that is a key priority," said O'Driscoll.