Northern makes both own-label and branded foods

It is to sell businesses that account for 40% of group revenues, plans to shed 150 head office jobs, and to cut 425 jobs at Park Cakes in Oldham.

It follows two profit warnings from the Leeds group earlier this year after poor sales. Annual profits at the firm fell to �45.1m from �62.2m last year.

Northern makes own-label goods for food retailers, and branded foods such as Fox's Biscuits and Goodfella's pizza.

The company employs about 20,000 people in the UK and the Republic of Ireland.

The Oldham jobs are going with the closure of the Park cream cakes line.

'Improved performance'

The new group will be targeted on fewer, higher performing product categories Pat O'Driscoll, Northern Foods chief executive See Northern Foods' share price

Northern Foods said it would sell its distribution, flour milling, cakes and speciality bread, and chilled pastry products divisions.

This includes Park Cakes at Oldham and Bolton; and Trafford Park Bakery, Kara Foods and the NFT Distribution depot in Manchester.

Chief executive Pat O'Driscoll said the slimmed-down firm would concentrate on branded frozen foods and ready meals.

"The company will be radically refocused to drive improved shareholder returns," she said in a statement.

"The new group will be targeted on fewer, higher performing product categories," she added.

"This will reduce complexity, drive improved performance, earnings and cashflow, and create a simpler, more competitive and resilient business."