Christmas rush cost Northern Foods £7m

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The Independent Online

The timing of Christmas led to a unexpected last-minute rush in the supermarkets, which Northern Foods struggled to meet, costing it £7m in profits.

Sean Christie, finance director, said: "In 2000, people shopped steadily in the week before Christmas. This time it was extremely quiet for most of that week, then on the Friday it went berserk. We were calling people back from holiday and working factories 24 hours a day, paying premium overtime."

The fresh food supplier saw its shares close down 13 per cent to 141p, as a raft of analysts downgraded recommendations on the stock and full-year profit forecasts.

Nicola Mallard, of ING Barings, said: "There's an element of 'Oh God, not again'. They always seems to blow it somehow. It's another disappointment from a company that always promises jam tomorrow."

Northern Foods said that despite "strong" sales in the third quarter, profits were flat. This is because four of its business units, which have been through restructuring, found it difficult to cope with Christmas. Northern Foods had a disappointing first half of the year and the City was hoping for better news later in the year.

ING yesterday cut its full-year pre-tax profit forecast by £8m to £100m, leaving it well below the £108m achieved the previous year.