The Guardian (UK): Northern Foods keeps to form by issuing profit alert: “Pat O'Driscoll, the new chief executive of Northern Foods, kept up an old habit when she issued a profit warning with her first major trading statement.”: “Asked whether bad luck had followed her from her previous employer, which has just been through its worst period in 100 years, she said: "I hope I have not brought the curse of Shell with me." (ShellNews.net) 11 Jan 05
Tuesday January 11, 2005
Pat O'Driscoll, the new chief executive of Northern Foods, kept up an old habit when she issued a profit warning with her first major trading statement. It was the company's third in the last four Januarys.
But she insisted she had not brought "the curse of Shell" from her old employer as she shrugged off an embarrassing setback that sent the Northern Foods' share price down 3.6% to 165.75p.
Ms O'Driscoll said the declining fortunes of Marks & Spencer were mainly to blame for the company's situation and profits for the year to the end of March would be closer to £80m than the £90m the City had forecast.
The Northern Foods boss said the progressive dividend policy remained in place but she could not rule out more operational cuts to improve shareholder returns.
Despite seeing a 10% increase in the sales of Christmas puddings and a 17% growth in mince pies, Ms O'Driscoll said the seasonal period had been disappointing.
"Sales overall in the chilled division were lower than expected," she said, adding that Northern Foods derives 30% of its turnover from M&S, which has been cutting supply costs.
Ms O'Driscoll was optimistic that a restructuring involving two factory closures and 1,000 redundancies - announced last September - would help put the company on track for its long-term goals. "The 2007 targets remain the same," she stressed.
Asked whether bad luck had followed her from her previous employer, which has just been through its worst period in 100 years, she said: "I hope I have not brought the curse of Shell with me."
She stressed that she had not worked in the exploration and production side of the oil business that had been at the centre of its problems and had only worked in the "downstream" part. She was head of Shell's European retail business.
Analysts were unimpressed by the food company's announcement pointing out it already badly lagged behind its competitors on margin levels.
"This is very disappointing," argued Andrew Saunders at Numis Securities. "This was the first real acid test and clearly it has not gone the way she [O'Driscoll] wanted. Northern Foods has given three January profit warnings in four years so in that way it was no surprise.
"But the new chief executive talked a good story and seems to have fallen at the first hurdle," he added.
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