London, Oct 7 - British food manufacturer Northern Foods Plc is on track to deliver full-year pretax profit in line with expectations after delivering a 3.9 percent rise in first-half underlying sales, the group said on Tuesday.
The company, which makes Goodfella's pizza and Fox's biscuits as well as supplying ready meals to Marks & Spencer Plc , said growth had been driven by a strong performance in bakery, with Fox's boosted by a new TV advertising campaign.
The average forecast for underlying full-year pretax profit is 48 million pounds, according to Reuters Estimates.
The group, which derives about a quarter of its sales from supplying Marks & Spencer, said total sales increased by 6.5 percent in the 26 weeks to Sept. 27.
Northern said it had achieved underlying sales growth of 2.4 percent from its chilled division, despite the ready meals market overall showing a decline of 2.5 percent. It attributed this to its "superior product offering".
Underlying bakery sales rose by 6.7 percent.
Northern said it had achieved a full recovery of higher input costs, with selling price increases averaging 5.6 percent, offsetting lower sales volumes of 1.7 percent.
The group had forecast a 20 million pounds rise in commodity costs in the year to next March, as well as a 12 million pounds rise in its electricity bill, and a 4 million impact from currency translation.
Shares in Northern Foods have underperformed the FTSE All Share Food Producers Index by 16 percent since the start of the year amid concerns that the rising input costs would put full-year profit forecasts at risk.