Northern produces Goodfella's Pizzas and Dalepak frozen foods

The group, which produces a number of own-label meals for supermarkets, saw its pre-tax, post exceptional items, profit fall 28.7% to �75.4m.

Releasing the results for the 12 months to 3 April, Northern Foods chairman Peter Blackburn admitted it had been a "difficult and disappointing year".

Sales were however up 8.5% to �1.54bn, and the company said cost savings had been introduced over recent months.

During the year Northern Foods sold off four businesses - Fox's Confectionery, Batchelors, Emile Tissot and Eden Vale.

Pizzas

"The inherent strengths of Northern Foods remain substantial," said Mr Blackburn.

"These are vital in a market place where competition is becoming ever more intense, as reflected in the recent slowing of food sales reported by some of our largest customers.

"Although this has been a difficult and disappointing year for Northern Foods, and we recognise that much remains to be done, I am confident that we have begun to take the right actions to equip the business to compete in this most demanding climate."

Mr Blackburn added that while much remained to be done to turn the group around, structural cost saving initiatives were continuing and he was confident that the company would realise its "undoubted potential" under new chief executive Pat O'Driscoll, who joined in March.

During the year Northern Foods bought the San Marco pizza brand for �900,000 from Heinz to add to its Goodfella's pizza business.