REG-Northern Foods PLC: Final Results

27 May 2009

NORTHERN FOODS PLC PRESS RELEASE

Full year results ending 28 March 2009

'CONTINUING RESILIENT PERFORMANCE IN

CHALLENGING ECONOMIC CONDITIONS'

Operating highlights

Business successfully adapted to current retail environment; growth in discount
sector and value products complementing our strength in the premium market

Strong performance in Chilled and Bakery, reflecting our superior product
offering; Frozen division growth impacted by Euro strength

Significant commodity cost increases successfully recovered

Financial highlights

Good sales growth, increasing total revenue by 4.6% to £975.2m (2007/08: £
931.9m)

Profit from operations* up 8.9% at £52.7m (2007/8: £48.4m), after £4.2m of
incremental investment in the business

Profit before tax* at £47.5m (2007/08: £50.1m), reflecting a reduced pension
credit

Profit for the period1 of £2.5m (2007/08: £34.5m), after restructuring costs of
£35.4m (2007/08: £4.7m) and tax allowance changes

Underlying EPS2 of 6.45 pence per share (2007/08: 5.62p)

Proposed dividend maintained at 4.50 pence per share (2007/08: 4.50p)

Robust balance sheet with new Revolving Credit Facility (RCF) in place through
to 2012; net debt3 £206.7m (2007/8: £200.2m)

2008/09 2007/08

£m £m

Revenue 975.2 931.9

Profit from operations* 52.7 48.4

Profit before taxation* 47.5 50.1

Underlying PBT4 39.0 34.4

Profit for the period1 2.5 34.5

Operating margin* 5.4% 5.2%

Return on invested capital* (ROIC5) 11.7% 11.0%

Underlying earnings per share (EPS2) 6.45p 5.62p

Adjusted earnings per share (EPS6) 7.76p 7.88p

Dividend per share (proposed) 4.50p 4.50p

Stefan Barden, Chief Executive of Northern Foods, said: "Northern Foods has
delivered a resilient performance this year, in challenging economic
conditions.

"We have successfully adapted the business to the current retail environment,
whilst continuing to invest to enhance the trading position of the Group. We
have much more to do, but year by year we are making Northern Foods a stronger
and more sustainable business.

"We anticipate that next year will be equally challenging, with the
continuation of food inflation and competitive pressures. Our operational and
financial strengths position us well to benefit when markets recover."

Enquiries:

Northern Foods: 0113 390 0110

Andy Booker, Group Finance Director

Andrew Hanson, Head of Corporate Communications

NOTE - contact on Wednesday 27 May via Andrew Hanson on 07809 595831

Tulchan Communications: 0207 353 4200

James Bradley / Lucy Legh

A presentation to analysts will take place on Wednesday 27 May at 09.30am at
UBS, 4th Floor, 100 Liverpool Street, London EC2M 2RH, or live via webcast at
www.northernfoods.com

Footnote definitions for press release:

* Before restructuring items which include costs or income
associated with restructuring of businesses and gains or losses on the disposal
or closure of businesses

1 Profit for the period includes restructuring costs of £
35.4m (2007/8: £4.7m) - including £22.9m for Fenland mothballing - and an
exceptional tax charge of £12.5m following the withdrawal of Industrial
Buildings Allowances

2 Underlying earnings per share (EPS) is before restructuring
items, movement on deferred tax due to change in legislation, one-off release
of prior year tax liability and the net pension financing credit. This is
reconciled to earnings per share in the financial statements

3 Net debt is defined as total borrowings (including both
short and long term bank loans, bonds, loan notes and finance leases) less cash
& cash equivalents and short term investments. Net debt will also include the
proportion of the fair value of the currency swaps, hedging the balance sheet
value of the Group's dollar denominated loan notes

4 Underlying profit before taxation reflects Group profit
before tax before restructuring items and net pension financing. This is
reconciled to PBT in the financial statements

5 ROIC is profit from operations before restructuring items for
continuing operations divided by a 13 month averageinvested capital (net equity
adjusted to exclude retirement benefit obligations net of deferred tax, and net
debt, together with accumulated goodwill previously written off)

6 Adjusted earnings per share (EPS) is basic EPS before
restructuring items and movement on deferred tax due to change in legislation
and one-off release of prior year tax liability. This is reconciled to
earnings per share in the financial statements

Performance review

Northern Foods has delivered a resilient performance this year, in challenging
economic conditions. We have successfully adapted the business to the current
retail environment, responding quickly to the recession with new value products
and discount ranges alongside our core market and premium heartland. Our
business with the discount retailers, or based around value products, is now
around a fifth of the Group's sales.

We have continued to drive performance improvements right across the Group,
growing sales, exiting low margin business, investing in the future, improving
operational efficiencies and ensuring that we are cash focused and cost
conscious. We remain focused on the key markets of Ready Meals; Sandwiches &
Salads; Pizza; Biscuits and Puddings. This year also saw Northern Foods secure
a prestigious contract to serve British Airways.

Total revenue increased by 4.6% to £975.2m and profit from operations* by 8.9%
to £52.7m over the prior year. Group profit before tax* at £47.5m, was lower
than the prior year, primarily reflecting a reduced pension credit. However,
underlying profit before tax4 (PBT) grew by 13.4% despite headwinds from the
strong Euro, increased investment in our brands and business start-ups. Return
on invested capital5 (ROIC) improved from 11.0% to 11.7%.

Profit before taxation* reduced by 5.2% to £47.5m (2007/08: £50.1m) reflecting
£4.2m of incremental investment in marketing and start-up costs for our
acquisitions made in the prior year. Profit for the period1 was £2.5m (2007/08:
£34.5m), as we absorbed restructuring items before taxation of £35.4m (2007/08:
£4.7m), relating primarily to the mothballing of the Fenland facility; and £
12.5m following the withdrawal of Industrial Buildings Allowances (IBAs).

A stronger underlying performance in Chilled and margin improvement in Bakery
emphasised the benefits we are starting to see from the strategy put in place
during 2007. Whilst profitability declined in Frozen, which is the division
most impacted by the Euro, Frozen retains a strong market position and we are
working hard to enhance its profit performance through cost reduction,
simplification and innovation.

Over the course of the year, material costs were around 12% higher than the
prior year whilst energy costs were approximately 64% higher. We, and other
manufacturers, see continued inflation looking ahead, with many key commodity
prices still up year on year. We continued to recover higher input costs fully
through the year.

The integration of the prior year acquisitions - Ethnic Cuisine; chilled soup
at Grimsby; and McDougalls frozen pastry - was completed during the period. We
also remained focused on reducing our cost base across the divisions and we
continued the evaluation of the proposed investment in a world class biscuits
factory to deliver a step change in efficiency.

We have a key focus on driving cash generation, with pre-restructuring free
cash flow7 of £35.4m in the year (2007/08: £48.3m). Net capital expenditure to
enhance our manufacturing infrastructure saw investment increase to 80% of
depreciation (2007/08: 42%); whilst working capital continues to be tightly
managed with an increase of only £10.0m (2007/08: £11.6m) driven by input
inflation and increased sales.

Our balance sheet remains robust and year end debt was £206.7m (2007/8: £
200.2m). Alongside our US Private Placement of £143m, which matures between
2012-2017, in March 2009 we completed a new £250m Forward Start banking
facility to July 2012, which will replace the existing £460m facility in July
2010. In this unprecedented economic environment and with weakness elsewhere
in the food manufacturing sector, our strong balance sheet provides us with the
capacity to support our future investment plans. We are actively managing the
Group's retirement benefit obligations to maintain a manageable service cost,
whilst reducing risk and volatility.

Outlook

Northern Foods has delivered a resilient performance in challenging economic
conditions. We anticipate that next year will be equally challenging, with the
continuation of food inflation and competitive pressures. Our operational and
financial strengths position us well to benefit when markets recover.

Financial performance and dividend

Revenue increased by 4.6% to £975.2m (2007/08: £931.9m), with underlying
revenue8 5.0% ahead. Profit from operations* improved to £52.7m (2007/08:
£48.4m) and operating margin* increased by 20 basis points to 5.4%. Group
profit before tax* declined 5.2% to £47.5m (2007/08: £50.1m) reflecting a
reduced net pension financing credit. Underlying PBT4, increased 13.4% to
£39.0m (2007/08: £34.4m). After restructuring items including the mothballing
of the Fenland facility, our proposal to consult on ceasing production and
closing the Hull site, and an increased tax charge of £12.5m due to the phasing
out of Industrial Buildings Allowances (IBAs), the statutory profit for the
period1 was £2.5m (2007/08: £34.5m).

Underlying earnings per share (EPS)2 increased 14.8% to 6.45p (2007/08: 5.62p),
whilst adjusted EPS6 declined 1.5% to 7.76p (2007/08: 7.88p). Basic EPS was
0.54p (2007/08: 7.08p).

The underlying full year effective tax rate (excluding the release of a prior
year tax liability) is 23.8% (2007/08: 23.4%), reflecting the lower Irish tax
rate. Following a change in UK corporate tax legislation in the Finance Act
2008, there is a one-off non-cash charge of £12.5m in the current year to
reflect the phasing out of IBA's. This phasing out was offset by a reduction
in the headline rate of UK Corporation Tax from 30% to 28% in the current year.

To reflect our prudent approach in this challenging and uncertain economic
environment, the Board proposes to maintain the total dividend payable in
respect of 2008/09 at 4.50p per share (2007/08: 4.50p). This represents
adjusted EPS cover of 1.7 times (2007/08: 1.8 times) and is consistent with our
policy of ensuring that our dividend is well covered by free cash flows.

Subject to shareholder approval, a final dividend of 2.95 pence per share (2007
/08: 2.95p) will be payable on 28 August 2009 to shareholders on the register
at 31 July 2009.

Key performance indicators

Alongside absolute profit and debt measures, the Group uses the following key
performance indicators (KPIs) to measure progress, as follows:

KPI 2008/09 2007/08

Revenue growth (underlying)8 5.0% 3.3%

Operating margin* 5.4% 5.2%

Return on net assets (RONA)* 14.7% 13.7%

Pre-restructuring free cash flow7 £35.4m £48.3m

Debt ratio (pre-restructuring) 2.1 times 2.0 times

Return on invested capital (ROIC)* 11.7% 11.0%

Each KPI is defined and assessed within this review. Non-financial KPIs are
featured in the Northern Way (our Corporate social responsibility review).

Revenue

The Group seeks to deliver selective, profitable increases in revenue by
focusing on attractive market segments with strong growth potential in areas
where margin is enhanced. We continue to exit low margin and low volume
products through selective range rationalisation. This in turn reduces
complexity and drives efficiency improvements in our facilities.

Revenue was up 4.6% at £975.2m (2007/08: £931.9m). Underlying revenue growth8,
a key measure for the Group, was up 5.0%. Prices increased by 4.2%, reflecting
the commodity price recovery effect, whilst volumes were up 0.8%. Northern
Foods continues to demonstrate it is a better balanced business through
capitalising on the growth of discount retailers alongside its traditional
premium heartland. Sales to the Group's top five customers by value (M&S,
Tesco, Sainsbury, Asda, Morrisons) remain at 77% and sales of our value ranges
to target cash conscious consumers now represent around a fifth of our
business.

Operating margin

Profit from operations* rose 8.9% to £52.7m (2007/08: £48.4m) and operating
margin* improved 20 basis points to 5.4% (2007/08: 5.2%). A strong performance
in our Chilled and Bakery divisions was offset by lower profits in our Frozen
division. Commodity inflation was in double digits during the year and,
working with our customers, we successfully recovered this in full through a
mix of selling price increases and other initiatives. We expect commodity
inflation to continue through 2009/10 albeit at lower levels and we plan to
fully recover inflation and drive margin improvement through investment in the
business and efficiency initiatives.

RONA

Each business is focused on driving stronger returns from the assets utilised
in that business. Better management of capital investment, together with
careful use of working capital, leads to improved asset utilisation. The
combination of margin and asset utilisation is measured through return on net
assets (RONA), which is defined as profit from operations* divided by average
operating assets invested in the business.

During the year RONA improved from 13.7% to 14.7%, reflecting improvements in
both operating margin and asset utilisation. We target 15% as a minimum medium
term RONA for each business and in 2008/09 the Bakery division continued to
achieve a return well above 15% and the Chilled division made further progress
towards this target. The impact of the stronger Euro on the Frozen division,
together with a competitive pizza market, resulted in a decline in RONA.

Profit before taxation

Profit before taxation* reduced by 5.2% to £47.5m (2007/08: £50.1m). Profit for
the period1 was £2.5m (2007/08: £34.5m). The charge for restructuring items
before taxation was £35.4m (2007/08: £4.7m), relating primarily to the
mothballing of the Fenland facility and other cost reduction projects. The
charge for restructuring items comprised £11.8m in cash and £23.6m in non-cash
items.

Net financing costs decreased to £13.7m (2007/08: £14.0m), reflecting lower
floating rates in the second half year as LIBOR declined. The net pensions
financing credit reduced to £8.5m (2007/08: £15.7m) due to lower asset
returns. As a result the net finance charge was £5.2m compared to a credit in
the prior year of £1.7m.

In accordance with accounting standards, the Company records it's expected
return on defined benefit pension assets within the financial statements each
financial year. It has been our practice to show this as a separate line
within the finance and expense section of the income statement. Whilst the
assets are held as long term investments to meet the long term pension scheme
obligations, the nature of the assets means that there can be significant
annual movements in asset values and hence returns. This has been very
pronounced in the last twelve months. We believe that this masks the true
underlying performance of the business and we have therefore introduced an
underlying PBT4 and underlying EPS2 calculation in this report, eliminating the
distorting impact of net pension financing.

Free cash flow and capital management

A continued focus on cash management was supported by our drive to achieve more
profitable utilisation of existing manufacturing capacity. Using RONA as a KPI
to embed this discipline across the Group, each business assesses its capital
requirements, utilising robust project evaluation techniques which evaluate
economic and cash criteria.

Gross capital expenditure (the purchase of property, plant and equipment) in
the year was £31.0m (2007/08: £21.5m), compared with depreciation and
amortisation of £39.3m (2007/08: £41.7 m). This represents 80% of depreciation
(2007/08: 52%) with a key project being the investment in increased automation
within our biscuits manufacturing. We expect capital expenditure, excluding
the new proposed biscuit investment which is currently being evaluated, to
continue at broadly similar levels in 2009/10.

Despite continued double digit inflationary increases, working capital remained
tightly managed, increasing by only £10.0m during the year. At the balance
sheet date, net working capital9 remained favourably negative at £(14.3)m (2007
/08: £(25.9m)).

The Group has successfully maintained its discipline over cash management and
generated further free cash flow of £24.2m (2007/08: £39.0m) including
restructuring cash items of £11.2m (2007/8: £9.3m).

Free cash flow measures the cash generated by the Group from its normal trading
activities and represents the cash available (after paying tax and interest
costs) to finance dividends, investments or acquisition activity. It is
analysed as follows:

2008/09 2007/08

£m £m
Operating cash flow (before
working capital and special
pension contributions) 80.7 84.0
Movement in working capital (10.0) (11.6)
Net interest paid (15.2) (13.6)
Net taxation paid (1.0) (3.0)
Capital expenditure (31.0) (21.5)
Asset sales - 4.4
Grants received 0.7 0.3
Free cash flow 24.2 39.0
Restructuring items 11.2 9.3
Pre-restructuring free cash flow 35.4 48.3

Debt

A key measure of our financial flexibility is our debt ratio. This is the
ratio of net debt to EBITDA10 (calculated under 'frozen UK GAAP' (the
accounting basis used when the Group's current financing facilities were
established)). This is targeted to be below 3.5 times, the limit imposed by
our financing agreements. For 2008/09, the debt ratio was 2.1 times (2007/08:
2.0 times).

Using its free cash flow, the Group invested £11.0m in returning cash to
shareholders through a share buy-back. A total of 17,500,000 shares were
repurchased during this financial year under the buy-back programme at an
average share price of 63p, enhancing earnings per share. The group incurred
£11.2m in cash restructuring costs relating to the Fenland mothballing and cost
reduction programmes.

After dividend payments of £20.7m (2007/08: £21.0m); a share buy-back of £
11.0m; and cash restructuring costs of £11.2m, the year end net debt3 was £
206.7m (2007/08: £200.2m). This level of debt, the majority of which is at
fixed rates, continues to position the Group favourably in current volatile
credit markets. The Group's fixed rate funding is through US private placement
notes of £143m, which mature between 2012 and 2017. In March 2009, we
completed a new £250m Forward Start banking facility through to July 2012,
which replaces the existing £460m facility in July 2010. Effective April 2009,
the current £460m facility was reduced to £305m. This reduction in facilities
is more cost effective by avoiding commitment fees on unused facilities whilst
remaining sufficient to support the Group's future investment plans. Reflecting
the prevailing financial market conditions, this will incur higher interest
costs next year.

ROIC

Group total equity reduced to £54.1m (2007/08: £165.4m) primarily reflecting
the change in the retirement benefit obligation. The Group's return on invested
capital (ROIC5), measuring the pre-tax return on shareholders' invested
capital, increased during the year to 11.7% (2007/08: 11.0%), as we continued
to improve the efficiency of the business.

Pensions

Under International Accounting Standard (IAS)19, there is a £71.5m deficit in
the pension fund, compared with a surplus of £61.6m at the end of our 2007/08
financial year. This primarily reflects the impact of economic conditions on
asset values during the year.

Northern Foods' long history of providing defined benefit pensions to its
employees has resulted in a large pension fund which we need to manage
prudently. The scheme is now closed to new members and work is well advanced
to reduce, but not eliminate, the potential for future funding volatility which
will be achieved through a liability driven investment programme. We need to
ensure that the future service accrual remains affordable to both the Company
and scheme members.

Our triennial actuarial pension funding review for the period to 31 March 2008
was completed, resulting in a funding deficit of £75m (Trustee basis) and
required no additional cash contributions from the Company, relying instead on
fund out-performance over an eight year period to meet the deficit. To
maintain the financial stability and competitiveness of the business, it has
been necessary to make changes to the Defined benefit scheme. After a period
of consultation, member contributions have been increased and the senior
management bonus population have been transferred to a Defined contribution
scheme. We continue to keep all pension arrangements under review.

Whilst the principal UK Defined benefit scheme has been closed to new entrants
since 2005, there remain some 2,207 active members of the scheme. Our aim is
to continue to provide competitive pension benefits to our employees at a cost
that is affordable to the Company and enables us to compete effectively in the
marketplace.

Business review

Chilled division

2008/09 2007/08
52 weeks 52 weeks

Revenue £486.8m £481.5m

Operating margin* 4.7% 4.6%

Profit from operations* £22.9m £22.1m

The division delivered a robust performance over the year. Revenue increased
by 1.1% to £486.8m (2007/08: £481.5m). Ready Meals growth offset slightly lower
volume growth in Sandwiches and Salads due to the poor summer weather.
Underlying revenue8 increased by 5.6% as a result of average selling prices
being 2.9% ahead, as we increased prices to recover commodity inflation, and
volumes were 2.7% ahead.

We worked closely with our customers to develop new value and discount products
in Pizza, Sandwiches and Salads, alongside our premium ranges. Improvements in
underlying performance were offset by start-up costs of £1.2m in commissioning
our chilled soup plant at Grimsby. Divisional profit from operations*
increased to £22.9m (2007/08: £22.1m) and operating margin* increased slightly
to 4.7% (2007/08: 4.6%).

With constrained capacity in the industry for producing ready meals, sandwiches
and salads profitably and with the high quality that consumers demand, we are
well positioned in markets which offer good long term growth prospects.

Ready Meals

Sales growth outperformed the market, with underlying sales increasing by 6.6%
in a market which fell by 2.0% (TNS data 52 w/e 22/03/09). This emphasised the
importance we place on repeat purchase rates as a key success driver across all
of our businesses. We are committed to driving improvements in profitability
across Ready Meals and we saw a good performance. Three specific products -
Melt in the Middle Fishcakes, Sweet & Sour Battered Balls and Prawn Primavera -
performed strongly during the period and were featured in TV advertising by
Marks & Spencer. Our Accompaniments range for M&S also saw strong growth,
helping provide products for the time poor consumer. In the run up to
Christmas, we saw over one million Ultimate Mash products supplied to M&S, a
great example of the high volume we can deliver from our modern, automated
sites. We are continuing to ensure that we utilise capacity at our sites in
the best way possible.

In May 2008 we announced the mothballing of our Fenland Foods facility in
Grantham, which produced Italian based cuisine for M&S. We were unable to
reach agreement to return Fenland to profitability, consistent with our stated
strategy to continue with business only where terms generate an adequate return
for the Group's shareholders. The Fenland mothballing has resulted in
restructuring items of £22.9m which includes impairment of fixed assets of £
18.1m and other costs of £4.8m, net of a retirement benefit obligation
curtailment gain of £0.4m. Cash costs associated with the Fenland mothballing
were £5.2m and non-cash costs were £17.7m. We continue to discuss the
potential re-opening of Fenland in the future with new customers.

Following the conclusion of negotiations to seek mutually acceptable and
commercially viable terms for business supplied from Northern Foods' Hull ready
meals facility, Northern Foods and its main customer served by the site have
agreed to terminate the existing supply contracts. As a result, we will be
commencing consultation with employees on a proposal to cease production and
close the site, in accordance with our strategy to continue with business only
where terms generate an adequate return. The proposal includes consultation to
move a proportion of production to other facilities. The net profit impact in
2009/10 will be minimal and the company will incur a one-off cash restructuring
cost in the 2009/10 financial year which is expected to be less than £5m. Our
2008/09 accounts include a non-cash impairment of £5.9m.

Promotional activity increased during the period as retailers sought to deliver
better value for hard-pressed consumers. Whilst we worked closely with all of
our major customers, we are less reliant on promotions to drive sales.

Sandwiches and Salads

In Sandwiches and Salads, revenue growth was ahead by 6.0% against market
growth of 0.7% in Sandwiches (ACN Scantrack 52 w/e 18/04/09) and 1.1% in Salads
(ACN Scantrack 52 w/e 18/04/09), but slower than anticipated due to the poor
summer weather. The business performed creditably despite the difficult market
conditions. We successfully introduced sandwiches for our major customers,
including Wiltshire Ham & West Country Cheddar for the Tesco Finest range, and
a range of sandwiches for M&S in its 'Best of British' range.

Our prepared Salads business delivered a commendable performance. Investment
to expand capacity at our Corby salads site was successfully completed during
the first half, providing us with additional capacity in this market.

Chilled pizza continues to operate in a challenging and promotionally driven
competitive environment, although we have been able to secure new business to
capitalise on the downturn and consumers looking for healthy yet convenient
products. Our chilled pizza sales remained stable during the year, supported
by premium and value ranges for several of our main customers. In line with
other areas of our business, we launched products under two new tertiary brands
for Tesco, Pizza Americano and Trattoria Verdi, focused on a specific price
point.

Frozen division

2008/09 2007/08
52 weeks 52 weeks

Revenue £272.4m £245.4m

Operating margin* 3.4% 4.6%

Profit from operations* £9.3m £11.4m

Further strengthening of the Euro (our manufacturing operations are based in
Ireland) and increased promotional activity impacted the Frozen division this
year. Total revenue was 11.0% ahead at £272.4m (2007/08: £245.4m) with
underlying revenue8 3.7% higher. The impact of price increases of 8.6%, as we
successfully recovered commodity inflation, saw Frozen volumes decline by
4.9%. Despite volume decline, frozen food, as evidenced by most market data,
remains a popular choice for time poor families and cash conscious consumers.

The impact from the continued strength of the Euro impacted overall
profitability by £5.0m in the full year. As a result, profit from operations*
reduced to £9.3m (2007/08: £11.4m), with operating margin* at 3.4% (2007/08:
4.6%). The division has undertaken a number of cost reduction programmes to
lower its cost base.

Pizza

We are adjusting our business model to the current economic conditions with a
continuous drive to lower cost in our manufacturing base. We consolidated pizza
production into two well invested lean manufacturing sites, with the move of
operations and employees as we closed the smaller Poldys site in Ireland to the
larger scale facilities at Naas and Longford.

We re-launched our San Marco pizza range during the second half, profitably
targeting a specific price point for the constrained consumer. We expect
further promotional activity to also drive sales in this segment. In Retailer
Own Brand (ROB), we continued to develop new products for several of our
customers, reflecting market data showing supermarket's own label ranges to be
increasingly popular.

Fish & Vegetables

Donegal Catch, our branded fish business predominantly retailed in Ireland,
continues to experience good growth in the sector and remains number one in
Ireland, along with our Green Isle vegetable brand. With over half of the
Irish market, Donegal Catch was introduced into the UK during the second half
of the year and we continue to work hard to secure business through our major
customers.

Pastry, Meat & Meat-Free Grills

Our prior year acquisition of the McDougalls brands in Pastry has been
successful, with good progress made. Our challenge to improve the performance
of the Pastry and Meat Grills businesses was set out last year and remains a
key priority. The McDougalls acquisition was fully integrated into our centre
of excellence at Portumna in Ireland. Consolidating capacity is helping to
improve the efficiency of our operation, enabling us to provide a better
service for customers and drive superior product innovation and margin
improvement. The McDougalls frozen pies range was successfully re-launched
during the year, establishing itself as the number one frozen pie brand in the
52 weeks to 21 March 2009 (ACN Scantrack 52 w/e 21/03/09).

Holland's continued its recovery plan, through product improvement and
effective press promotion. Holland's, which remains a strong brand in the North
West of England, has re-focused on its core chip shop outlets and is looking to
increase distribution in foodservice and at sporting venues. Whilst Meat
Grills were again impacted adversely by the poor summer weather in the
important barbeque season, the Dalepak business benefited from a number of
performance improvements and the launch of the exciting Gardein Meat-Free
brand. The growth in the healthier cooking market continues to provide
attractive opportunities.

Bakery division

2008/09 2007/08
52 weeks 52 weeks

Revenue £216.0m £205.0m

Operating margin* 9.5% 7.3%

Profit from operations* £20.5m £14.9m

The Bakery division delivered a strong performance over the year, building on
the improvement from the prior year. We further increased our investment in
the Fox's brand through the Vinnie campaign, driving improved national
awareness and distribution. Revenue increased by 5.4% to £216.0m (2007/08: £
205.0m). Selling prices increased by 1.5% as we successfully recovered
commodity inflation and volumes increased by 3.9%, despite exiting some
unprofitable or low margin retailer own brand (ROB) contracts. The premium
nature of the Fox's brand and increased focus on higher margin ROB business
helped drive operating margin improvement, with profit from operations*
increasing by 37.6% to £20.5m (2007/08: £14.9m), and operating margin*
improving to 9.5% (2007/08: 7.3%).

Competitive pressure in the puddings market will bring challenges to improve
profitability, yet we are focused on retaining our market leadership. In the
biscuits market, there is potential to continue profit improvement over the
medium term. The sweet biscuit market grew by 8% in 2008/09 (ACN Scantrack 52
w/e 21/03/09), with the Fox's brand share increasing to 9.3%.

Biscuits

Biscuits represents a significant growth opportunity for Northern Foods, with
our commitment to invest in the Fox's brand showing real benefits. Our
increased spend, by £1.8m, in the new 'Vinnie' TV advertising campaign helped
increase the number of households buying Fox's biscuits during the period. As
with all our businesses, Fox's has focused on its 'Power 5' (its top five best
selling products), with our top five products driving incremental sales and
margins. Our most popular product, Rocky, is set for re-launch in the autumn.

Reducing complexity has helped our overall performance and, whilst our exit
from a number of low profit own label contracts has helped us to focus on
higher value business, we continue to work with our retail customers to develop
new propositions. Examples include the Oatland Oaties range, which is targeted
at cash conscious consumers. We have seen further growth with our ability to
adapt products for customers such as Aldi and Netto helping us to increase
orders for ROB business.

We announced in July that we would evaluate a project to streamline our biscuit
manufacturing operations and reduce costs by transitioning from three
production sites to two world class facilities, building on recent investments
in greater automation. We are continuing the feasibility phase of this project
to ensure that we rigorously assess all the options in view of the extremely
volatile and recessionary environment. This project offers the potential to
improve efficiency. Whilst we recognise the uncertainty for our employees, we
have to evaluate all the options comprehensively. We are working towards
concluding the feasibility at the end of 2009. In the meantime, we remain
committed to open communication with our employees throughout this process.

Puddings

In Puddings, a market where we have leadership, our Christmas trading period
was successfully delivered. All of the Christmas pudding stock we made at our
Matthew Walker site was sold and once again we received excellent feedback on
the quality and taste of our products, which derives from a unique steaming
process, built on 110 years of experience. Our unique pressurised steam cook
process and range of different recipes, from extra-matured to nut-free, saw our
products featured across all of the major retailers, from the traditional
discount supermarkets to the premium end of the market.

A new competitor to target mainstream retailers in the puddings market for
Christmas 2009 emerged during the year. The necessary investment to maintain
our leadership in this market will reduce short term profitability. However, we
believe that the quality required by consumers in this market will keep us well
placed across our customer base. We also continue to manage the complexity
within this business, whilst ensuring that our quality is undiminished.
Elsewhere in our Puddings business, we launched a range of sponge puddings,
including a new brand, 'Scrummie', to help support our all year round
business. In four exciting flavours, Scrummie evokes memories of childhood
with its innovative 'sticky fingers' packaging design. Our belief is that our
main retailer own brand (ROB) and branded ranges continue to offer attractive
opportunities for further development.

Footnote definitions:

* Items which relate to significant restructuring events are
presented as a separate column within their relevant Consolidated income
statement category. Presentation of these items in a separate column helps to
provide a better indication of the Group's underlying business performance.
Restructuring items include costs or income associated with the restructuring
of businesses and gains or losses on the disposal or closure of businesses

1 Profit for the period includes restructuring costs of £
35.4m (2007/8: £4.7m) - including £22.9m for Fenland mothballing - and an
exceptional tax charge of £12.5m following the withdrawal of Industrial
Buildings Allowances

2 Underlying earnings per share (EPS) is before restructuring
items, movement on deferred tax due to change in legislation, one-off release
of prior year tax liability and the net pension financing. This is reconciled
to earnings per share in the financial statements

3 Net debt is defined as total borrowings (including both
short and long term bank loans, bonds, loan notes and finance leases) less cash
& cash equivalents and short term investments. Net debt will also include the
proportion of the fair value of the currency swaps, hedging the balance sheet
value of the Group's dollar denominated loan notes

4 Underlying profit before taxation reflects Group profit
before tax before restructuring items and net pension financing. This is
reconciled to PBT in the financial statements

5 ROIC is profit from operations before restructuring items for
continuing operations divided by a 13 month averageinvested capital (net equity
adjusted to exclude retirement benefit obligations net of deferred tax, and net
debt, together with accumulated goodwill previously written off)

6 Adjusted earnings per share (EPS) is basic EPS before
restructuring items and movement on deferred tax due to change in legislation
and one-off release of prior year tax liability. This is reconciled to
earnings per share in the financial statements

7 Free cash flow is net cash from operating activities,
adjusted for special pension contributions, less net capital expenditure, plus
interest received. Net capital expenditure is purchase of property, plant &
equipment (PPE) less grants received and proceeds from sale of PPE

8 Underlying revenue excludes the impact of currency rate
changes, product categories no longer manufactured, acquisitions and
discontinued operations including Fenland

9 Net working capital is defined as inventories plus trade
and other receivables less trade and other payables

10 EBITDA is earnings before interest, tax, depreciation and
amortisation. It is calculated as profit from operations plus depreciation and
amortisation, all measured before restructuring items

Risks and uncertainties

The operation of a public company involves a series of risks and uncertainties
across a range of strategic, commercial, operational and financial areas.
Northern Foods has a robust internal control and risk management process, as
outlined in the Corporate governance review, which is designed to provide
assurance but which cannot avoid all risks. Outlined below are potential risks
that could impact the Company's performance, causing actual results to vary
from those experienced previously or described in forward looking statements
within this document. These risks are monitored on an ongoing basis through
the Company's risk management processes. Additional risks and uncertainties
not identified may also have an adverse material effect on the Company.

Economic uncertainty - the Company is responding to the current economic
conditions by balancing its product portfolio in those markets where this is
considered to be appropriate. A number of discount products have been
introduced in different markets to compete with the current trend of consumers
turning towards value products, whilst maintaining acceptable margins. Given
the uncertain consumer outlook, the Company continues to manage cost and cash
closely. Sales weighting to the second half year, in particular, assumes sales
will be in line with historical sales patterns over the seasonal trading
period;

Customer relationships - the Company seeks to manage the risks presented by its
consolidated customer base, and the highly competitive environment that
characterises the industry (which generally operates without long term
contracts), through its high service, high quality, low cost model targeted
across a portfolio of markets where it has strong positions. This is supported
by product development programmes and by maintaining and developing strong
robust relationships with customers. The Company also monitors customer credit
risk to manage exposure in the current challenging environment;

Consumer trends - exposure to changing consumer trends can impact
profitability. The Company seeks tomanage these through portfolio changes,
with greater weight towards growth trends (which include health, convenience
and indulgence) - for example, by managing new product innovation to expand
sales in these areas, while managing the exposure to declining market sectors -
and to providing profitable value sector products during times of economic
slowdown;

Operational disruption - the short lead times involved in servicing our
customers can lead to an adverse impact fromdisruption to our manufacturing and
distribution facilities (for example, by fire, health and safety failure,
problems of supply, information systems failure, workforce action or
environmental incident). This is managed through a process including systems
of standard operating procedure, regulatory compliance, dedicated steering
groups, monitoring, audit, consultation and multiple sourcing. Insurance cover
is maintained where appropriate but may not cover all risks and losses;

Business continuity - the Group is at risk to disruption at key sites from
incidents such as a major fire which could result in significant operational
issues. Our businesses have incident management processes and continuity plans
in place to manage the impact of such an event as well as insurance to mitigate
the financial impact. A major update of these plans is currently nearing
completion;

Legislation, regulation and litigation - Northern Foods manages a range of
regulatory requirements regarding the production, sale, safety, labelling,
composition/ingredients and disposal of its products. Compliance monitoring
and proactive initiatives seek to manage this risk. The Group has policies and
ongoing monitoring in place to ensure that employees are aware of their
regulatory responsibilities. Litigation claims and proceedings can have an
adverse effect on the Company's results;

Change management, recruitment and retention - ongoing change requires close
management attention and the Company has experience of managing such risks and
has action plans to mitigate them, including Board oversight and project
management processes. Failure to implement and complete change can impact
financial results, employee recruitment and retention, with the latter also
subject to the availability of a suitable pool of domestic and overseas staff.
Proactive initiatives for this are included in the Northern Way contained in
the Annual report for 2008/09;

Managing procurement costs - exposure to price (including foreign exchange
impact) and supply fluctuations for raw materials and services is managed by a
central procurement function, to better negotiate with relationship based
suppliers, agreeing forward prices where appropriate and available. The
Company seeks to pass on cost increases, where possible, to its customers
through price rises but constraints in achieving this can affect the Company's
results. In addition, the Company manages exposure to key suppliers through
dual supplier sourcing where feasible;

Food safety - appropriate product manufacturing, storage and avoidance of
contamination are critical. Standard manufacturing and distribution protocols
are in place, together with proven product recall processes for product
recovery. Widespread food scares can impact directly through the sale of a
contaminated product or indirectly through lack of supply or reduced consumer
demand;

Environment - the Company maintains environmental policies and relationships
with relevant regulators to manage the impact its activities have on the
environment. In addition, the Company has an active programme (described in
the Northern Way) to reduce this impact over time. Nevertheless, changes in
environmental legislation or unplanned incidents could impact the Company's
operations adversely;

Financial risks - the Company has committed financing in place, which can only
be withdrawn in the event of a breach of financing agreement, such as
covenants, when the Company might be restricted in its ability to operate
normally and could be required to dispose of assets to pay down debt and incur
additional costs. The principal banking facility is now in place until July
2012 and funding availability for that renewal may be more constrained in light
of recent credit market conditions. Board policy is to operate with fixed rate
borrowings within a range of 20% to 50% of net borrowings over the medium term,
to manage interest rate risk (although the Group may operate outside this range
from time to time). Pension schemes could require increases in future Company
funding and pension regulation could restrict the freedom of the Company to
undertake certain corporate activities (including disposals and return of
capital to shareholders). The Company has certain tax exposures in addition to
trading tax balances. These exposures total £23.8m which are provided for but
which, in the event of an adverse finding by taxation authorities, could result
in a substantial payment of cash. The Irish business is exposed to foreign
exchange risk and transaction exposure is hedged on a rolling 12 month basis.

Forward looking statements

Forward looking statements are made throughout this document. These forward
looking statements are based on a number of assumptions concerning future
events and information currently available. The user of this document should
not rely unduly on these forward looking statements, which are not a guarantee
of performance and which are subject to a number of uncertainties and other
facts, many of which are outside of the Company's control and could cause
actual events to differ materially from those in these statements.

Although Northern Foods believes that the expectations reflected in those
forward looking statements are reasonable, it cannot assure users that those
expectations will prove to be fulfilled. In addition to those factors
described under 'Risks and Uncertainties', other factors could cause actual
results to differ materially from our expectation, including economic and
political conditions, changes in laws, regulation and accounting standards,
customer relationships and actions, effectiveness of spending and marketing
programmes and unusual weather patterns. No guarantee can be given of future
results, levels of activity, performance or achievements.

Comparative statements

In this report, Northern Foods makes certain statements with respect to its
market position or its products' or its brands' market positions by comparisons
with third parties or their products or brands. These statements are based on
both internal sources and independent sources and are accurate to the best of
the knowledge and belief of Northern Foods.

Going concern

In determining whether the Group's annual consolidated financial statements can
be prepared on a going concern basis, the directors considered the Group's
business activities, together with the factors likely to affect its future
development, performance and position. The review also includes the financial
position of the Group, its cash flows, liquidity position and borrowing
facilities. The key factors considered by the directors were as follows:

the implications of the challenging economic environment and future
uncertainties on the Group's revenues and profits. The Group undertakes
forecasts and projections of trading and cash flows on a regular basis. This
allows the Group to target performance and identify areas of focus for
management;

the impact of the competitive environment within which the Group's businesses
operates;

the potential actions that could be taken in the event that revenues are worse
than expected, to ensure that operating profit and cash flows are protected;

the Group has access to overdraft facilities and a committed bank facility to
meet day-to-day working capital requirements. Following the refinancing of the
bank facility in March 2009, the Group has committed bank facilities to July
2012. In April 2009 the existing facility was reduced from £460m at March 2009
to £305m. The facility will reduce to £250m in July 2010.

As at the date of this report, the directors have a reasonable expectation that
the Company and Group have adequate resources to continue in business for the
foreseeable future. Accordingly, the Annual report and financial statements
for the 52 weeks ended 28 March 2009 have been prepared on the going concern
basis.

Statement of directors' responsibilities

in relation to the financial statements

The responsibility statement below has been prepared in connection with the
Company's full Annual report and accounts for the 52 weeks ended 28 March 2009.
Certain parts thereof are not included within this announcement.

Directors' responsibility statement

We confirm to the best of our knowledge:

the financial statements, prepared in accordance with International Financial
Reporting Standards as adopted by the European Union, give a true and fair view
of the assets, liabilities, financial position and profit and loss of the
Company and the undertakings included in the consolidation taken as a whole;
and

the business review, which is incorporated into the directors' report, includes
a fair review of the development and performance of the business and the
position of the Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties they face.

This responsibility statement was approved by the Board of Directors on 27 May
2009 and signed on its behalf by:

S Barden A Booker

Chief Executive Officer Group Finance Director

27 May 2009 27 May 2009

Consolidated income statement

for the 52 weeks ended 28 March 2009

Before Before
restructuring Restructuring restructuring Restructuring
items items Total items items Total
2009 2009 2009 2008 2008 2008
£m £m £m £m £m £m

Revenue 975.2 - 975.2 931.9 - 931.9

Profit from
operations 52.7 (35.4) 17.3 48.4 (4.7) 43.7

Finance income 54.2 - 54.2 59.2 - 59.2

Finance expense (59.4) - (59.4) (57.5) - (57.5)

Profit before
taxation 47.5 (35.4) 12.1 50.1 (4.7) 45.4

Taxation (6.6) 9.5 2.9 (11.7) 0.8 (10.9)

Movement on
deferred tax due
to change in
legislation (12.5) - (12.5) - - -

Taxation (19.1) 9.5 (9.6) (11.7) 0.8 (10.9)

Profit for the
period 28.4 (25.9) 2.5 38.4 (3.9) 34.5

All amounts in the current and prior periods relate to continuing activities.

The result for the period is all attributable to equity holders of the parent.

Earnings per share (pence)

Basic 0.54 7.08

Diluted 0.52 6.95

Consolidated balance sheet

as at 28 March 2009

28 March 29 March
2009 2008
£m £m

Non-current assets

Goodwill 57.1 54.8

Other intangible assets 3.9 4.6

Derivative financial instruments 26.6 -

Property, plant and equipment 301.6 320.0

Retirement benefit assets - 71.5

Deferred taxation assets 17.1 -

406.3 450.9

Current assets

Inventories 48.5 47.2

Trading investments 0.1 0.1

Trade and other receivables 120.0 111.3

Derivative financial instruments 1.1 -

Cash and cash equivalents 60.8 72.9

230.5 231.5

Total assets 636.8 682.4

Current liabilities

Trade and other payables (182.8) (184.4)

Provisions (3.6) (2.3)

Current taxation liabilities (22.0) (26.0)

Bank loans and overdrafts (9.9) (0.3)

(218.3) (213.0)

Non-current liabilities

Revolving credit facility 2010 (115.0) (130.0)

Senior loan notes 2012-2017 (162.0) (131.6)

Derivative financial instruments - (4.1)

Retirement benefit obligations (71.5) (9.9)

Deferred taxation liabilities (2.0) (14.7)

Accruals and deferred income (13.9) (13.7)

(364.4) (304.0)

Total liabilities (582.7) (517.0)

Net assets 54.1 165.4

Equity

Share capital 128.6 128.6

Share premium account 65.1 65.1

Capital redemption reserve 23.6 23.6

Reserve for own shares (50.5) (39.5)

Employee share ownership trust reserve (8.8) (8.3)

Hedging and translation reserve 39.8 21.4

Other reserves 8.0 5.2

Accumulated deficit (151.7) (30.7)

Equity attributable to the equity holders of the parent 54.1 165.4

The financial statements were approved by the Board of directors and authorised
for issue on 27 May 2009. They were signed on its behalf by:

S Barden A Booker

Director Director

27 May 2009 27 May 2009

Consolidated cash flow statement

for the 52 weeks ended 28 March 2009

2009 2008
£m £m

Net cash from operating activities 54.1 32.5

Investing activities:

Interest received 0.4 1.3

Purchase of property, plant and equipment (31.0) (21.5)

Proceeds of sale of property, plant and equipment - 4.4

Disposal of trading investments - 4.8

Acquisitions of subsidiary and businesses

(net of cash acquired, acquisition costs, working capital and debt
adjusters) - (22.0)

Receipt of deferred consideration - 6.7

Grants received 0.7 0.3

Net cash used in investing activities (29.9) (26.0)

Financing activities:

Dividends paid (20.7) (21.0)

(Decrease)/increase in amounts drawn on Revolving credit facility 2010 (15.0) 45.0

Purchase of treasury shares (11.0) (5.3)

Purchase of shares for Employee share ownership trust (0.5) (4.1)

Net cash (used in)/from financing activities (47.2) 14.6

Net (decrease)/increase in cash and cash equivalents (23.0) 21.1

Net cash and cash equivalents:

At start of period 72.6 47.9

Effect of foreign exchange rates 1.3 3.6

Cash and cash equivalents at end of period 50.9 72.6

Cash and cash equivalents comprise:

Cash and cash equivalents 60.8 72.9

Bank loans, overdrafts and loan notes due within one year (9.9) (0.3)

50.9 72.6

Reconciliation of net cash flow to movements
in net debt

for the 52 weeks ended 28 March 2009

2009 2008
£m £m

Net (decrease)/increase in cash and cash equivalents (23.0) 21.1

Decrease in trading investments - (4.8)

Decrease/(increase) in amounts drawn on Revolving credit facility
2010 15.0 (45.0)

Decrease/(increase) in finance leases 0.3 (0.8)

(7.7) (29.5)

Effect of foreign exchange rates 1.3 3.6

Other movements (0.1) (0.1)

Movements in net debt in period (6.5) (26.0)

Net debt at start of period (200.2) (174.2)

Net debt at end of period (206.7) (200.2)

Consolidated statement of recognised income and expense

for the 52 weeks ended 28 March 2009

2009 2008
£m £m

Currency translation differences on overseas investment 16.9 13.0

Actuarial (losses)/gains on defined benefit pension schemes (143.1) 35.3

Taxation on actuarial (losses)/gains taken directly to equity 40.1 (12.8)

Fair value movement on cash flow hedge 34.0 2.4

Transfer to profit or loss on cash flow hedge (32.5) 1.1

Net income recognised directly in equity (84.6) 39.0

Profit for the period from operations 2.5 34.5

Total recognised income for the period (82.1) 73.5

Total recognised income and expense for the period is all attributable to
equity holders of the parent.

Notes

1 Basis of preparation

The results comprise those of Northern Foods plc and its subsidiaries for the
52 weeks ended 28 March 2009. This preliminary announcement does not constitute
the company's statutory financial statements for the periods ended 2008/09 and
2007/08. Statutory financial statements for 2007/08 have been delivered to the
Registrar of Companies, whereas those for 2008/09 will be delivered following
the Company's Annual general meeting. The financial statements for the 52 weeks
ended 28 March 2009 were approved by the directors on 27 May 2009.

The auditors have reported on those financial statements; their reports were
unqualified, did not draw any attention to any matters by way of emphasis and
did not contain a statement under Section 237 (2) or (3) of the Companies Act
1985. The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). These financial statements
have also been prepared in accordance with the Companies Act 1985.

2 Segmental reporting

Business segments

For management purposes the Group is organised into three operating divisions;
Chilled, Frozen and Bakery. These divisions are the basis on which the Group
reports its primary segment information. The operating divisions are as
follows:

Division Major product category

Chilled Ready Meals, Sandwiches & Salads

Frozen Pizza, Fish & Vegetables, Pastry, Meat & Meat-free products

Bakery Biscuits, Puddings

Segment information

The segment information is as follows:

Chilled Frozen Bakery Total

2009 2008 2009 2008 2009 2008 2009 2008

£m £m £m £m £m £m £m £m

Revenue from continuing operations 486.8 481.5 272.4 245.4 216.0 205.0 975.2 931.9

Less revenue from acquisitions (15.0) - (5.2) - - - (20.2) -

Product categories no longer
manufactured (18.8) (52.6) - - - - (18.8) (52.6)

Foreign exchange - - (12.6) - - - (12.6) -

Underlying revenue 453.0 428.9 254.6 245.4 216.0 205.0 923.6 879.3

Underlying revenue allows comparability between the current and prior periods.
Underlying revenue excludes the impact of currency rate changes, product
categories no longer manufactured, acquisitions and discontinued operations
including Fenland.

Underlying revenue has been adjusted to exclude revenue earned in the current
period from acquisitions which corresponds to the period in the prior year when
the acquired operations were not part of the Group.

External revenue Profit from operations*

2009 2008 2009 2008
£m £m £m £m

Continuing operations:

Chilled 486.8 481.5 22.9 22.1

Frozen 272.4 245.4 9.3 11.4

Bakery 216.0 205.0 20.5 14.9

975.2 931.9 52.7 48.4

Net finance (costs)/income* (5.2) 1.7

Profit before taxation* 47.5 50.1

Taxation* (19.1) (11.7)

Profit for the period* 28.4 38.4

A reconciliation of profit before taxation* to underlying profit before tax* is
shown below:

Profit before taxation* 47.5 50.1

Net pensions financing credit (8.5) (15.7)

Underlying profit before tax* 39.0 34.4

* before restructuring items

Restructuring items from operations of £35.4m (2007/08: £4.7m) comprised
Chilled £30.2m (2007/08: £1.3m), Frozen £2.7m (2007/08: £2.9m) and Bakery £2.5m
(2007/08: £0.5m).

Intersegmental sales were charged at prevailing market prices and were
immaterial for both the current year and prior period.

Profit from operations after restructuring items was: Chilled £7.3m loss (2007/
08: £20.8m profit), Frozen £6.6m (2007/08: £8.5m) and Bakery £18.0m (2007/08:
£14.4m).

2009 2008

Assets Liabilities Total Assets Liabilities Total
Assets/(liabilities) £m £m £m £m £m £m

Chilled 229.1 (74.0) 155.1 260.8 (76.8) 184.0

Frozen 194.2 (67.6) 126.6 176.1 (59.0) 117.1

Bakery 103.7 (36.5) 67.2 99.8 (35.0) 64.8

Operating assets/(liabilities) 527.0 (178.1) 348.9 536.7 (170.8) 365.9

Unallocated corporate assets:

Cash at bank and in hand 60.8 - 60.8 72.9 - 72.9

Trading investments 0.1 - 0.1 0.1 - 0.1

Corporate other receivables 4.1 - 4.1 1.2 - 1.2

Retirement benefit assets - - - 71.5 - 71.5

Deferred tax assets 17.1 - 17.1 - - -

Derivative financial instruments 27.7 - 27.7 - - -

Unallocated corporate liabilities:

Total borrowings - (286.9) (286.9) - (261.9) (261.9)

Derivative financial instruments - - - - (4.1) (4.1)

Retirement benefit obligations - (71.5) (71.5) - (9.9) (9.9)

Deferred tax liabilities - (2.0) (2.0) - (14.7) (14.7)

Current tax liabilities - (22.0) (22.0) - (26.0) (26.0)

Corporate other payables - (22.2) (22.2) - (29.6) (29.6)

Total assets/(liabilities) 636.8 (582.7) 54.1 682.4 (517.0) 165.4

3 Restructuring items

2009 2008

£m £m

Restructuring items from operations (35.4) (4.7)

Taxation 9.5 0.8

Total (25.9) (3.9)

Restructuring items of £35.4m comprised: £22.9m relating to the impact of
mothballing the Fenland ready meals facility, with an £18.1m non-cash asset
impairment, a £0.4m curtailment gain and a £5.2m cash rationalisation cost.
Other costs relate to asset impairments of £5.9m in relation to the Hull site,
and other rationalisation charges totalling £6.6m across the Chilled, Bakery
and Frozen divisions will help drive future profitability improvement.

Items which relate to significant restructuring events are presented as a
separate column within their relevant Consolidated income statement category.
Presentation of these items in a separate column helps to provide a better
indication of the Group's underlying business performance. Restructuring items
include costs or income associated with the restructuring of businesses and
gains or losses on the disposal or closure of businesses.

4 Taxation

2009 2008

£m £m

Current taxation:

UK corporation tax 1.8 (0.4)

Overseas tax 2.0 1.2

Tax on restructuring items - UK (4.2) -

Tax on restructuring items - overseas (0.2) (0.2)

(0.6) 0.6

Deferred taxation:

UK deferred tax 3.2 11.2

Overseas tax (0.4) (0.3)

Movement on deferred tax due to change in 12.5 -
legislation

Tax on restructuring items - UK (5.1) (0.6)

10.2 10.3

Tax charge for the period 9.6 10.9

UK Corporation tax includes a one-off release of a prior year tax liability of
£4.7m (2007/08: £nil).

5 Dividends

2009 2008
Equity dividends on ordinary shares £m £m

Amounts recognised in the period:

Final dividend for the 52 weeks ended 29 March 2008 of 2.95p (2006/07: 2.75p) 13.6 13.4
per share

Interim dividend for the 52 weeks ended 28 March 2009 of 1.55p (2007/08: 1.55p) 7.1 7.6
per share

20.7 21.0

Proposed final dividend for the 52 weeks ended 28 March 2009 of 2.95p (2007/08: 13.6 14.2
2.95p) per share

The proposed final dividend is subject to approval by shareholders at the
Annual general meeting and accordingly has not been included as a liability in
these financial statements.

6 Earnings per share

Diluted
Basic Diluted Basic earnings
earnings earnings earnings per
Earnings per share per share Earnings per share share

2009 2009 2009 2008 2008 2008

Earnings and earnings £m pence pence £m pence pence
per share

Earnings used for
calculation of
earnings per share 2.5 0.54 0.52 34.5 7.08 6.95

Restructuring items 25.9 5.55 5.40 3.9 0.80 0.79

Movement on deferred
tax due to change in
legislation 12.5 2.68 2.61 - - -

One off release of
prior year tax
liability (4.7) (1.01) (0.98) - - -

Adjusted earnings per
share* 36.2 7.76 7.55 38.4 7.88 7.74

Net pensions
financing credit net
of tax (6.1) (1.31) (1.27) (11.0) (2.26) (2.22)

Underlying earnings
per share** 30.1 6.45 6.28 27.4 5.62 5.52

2009 2008

Number of shares number number
(m) (m)

Weighted average number of shares 514.2 514.2

Own shares held (41.2) (22.5)

Shares held in Employee share ownership trust (ESOT) (6.2) (4.3)

Weighted average number of shares used for calculation of basic
earnings
per share and earnings per share before restructuring
items 466.8 487.4

Savings-related share options - 0.8

Executive share options - 0.7

Long term incentive plan 0.4 0.7

Deferred share bonus plan 2.8 3.4

Matching share award 1.0 0.9

Performance share plan 8.3 2.4

Weighted average number of shares used for calculation of diluted
earnings per share and

diluted earnings per share before restructuring items 479.3 496.3

* Adjusted earnings per share is earnings used for calculation of earnings per
share before restructuring items, movement on deferred tax due to change in
legislation and one off release of prior year tax liability

** Underlying earnings per share is earnings used for calculation of earnings
per share before restructuring items, movement on deferred tax due to change in
legislation, one off release of prior year tax liability and net pensions
financing

7 Reconciliation of net cash from operating activities

2009 2008
£m £m

Profit from operations - continuing operations 17.3 43.7

Adjustments for:

Depreciation of property, plant and equipment and amortisation of other
intangible assets 39.3 41.7

Impairment of property, plant and equipment 24.0 1.5

Loss on disposal of property, plant and equipment 0.1 0.3

Increase/(decrease) in provisions 1.3 (5.4)

Change in retirement benefit obligation excluding special pension contributions (2.5) 2.0

Equity settled incentive scheme 2.7 1.1

Grants and other non-cash movements (1.5) (0.9)

Operating cash flow before movement in working capital and special pension
contributions 80.7 84.0

Special pension contributions - (22.0)

Operating cash flow before movement in working capital 80.7 62.0

Movement in inventories 1.3 1.5

Movement in trade and other receivables (2.8) 3.7

Movement in trade and other payables (8.5) (16.8)

Cash from operations 70.7 50.4

Interest paid (15.6) (14.9)

Net taxation paid (1.0) (3.0)

Net cash from operating activities 54.1 32.5

8 Retirement benefit obligations

Amounts recognised in the income statement in respect of the Group's defined
benefit schemes and post employment medical benefit scheme are as follows:

Defined benefit Post retirement Total
schemes medical benefit scheme retirement
benefit schemes

2009 2008 2009 2008 2009 2008
£m £m £m £m £m £m

Current service cost 6.2 9.7 - - 6.2 9.7

Interest on obligation 45.0 42.3 0.3 0.2 45.3 42.5

Expected return on scheme (53.8) (58.2) - - (53.8) (58.2)
assets

Curtailment gain (1.2) - - - (1.2) -

(3.8) (6.2) 0.3 0.2 (3.5) (6.0)

The amounts recognised in the Consolidated balance sheet in respect of the
Group's defined benefit schemes and post retirement medical benefit scheme are
as follows:

Defined benefit Post retirement Total retirement
schemes medical benefit scheme benefit schemes

2009 2008 2009 2008 2009 2008
£m £m £m £m £m £m

Present value of obligations (705.1) (718.2) (3.6) (4.4) (708.7) (722.6)

Fair value of scheme assets 637.2 784.2 - - 637.2 784.2

(67.9) 66.0 (3.6) (4.4) (71.5) 61.6

The following table shows the split of the Group's defined benefit schemes and
post retirement medical benefit scheme between retirement benefit assets and
retirement benefit obligations:

Defined benefit Post retirement Total retirement
schemes medical benefit scheme benefit schemes

2009 2008 2009 2008 2009 2008
£m £m £m £m £m £m

Retirement benefit assets - 71.5 - - - 71.5

Retirement benefit obligations (67.9) (5.5) (3.6) (4.4) (71.5) (9.9)

(67.9) 66.0 (3.6) (4.4) (71.5) 61.6

The table above does not include the related deferred tax assets and
liabilities.

9 The Annual report will be posted to shareholders, who requested a hard copy,
on 12 July 2009 and will also be available on the website
(www.northernfoods.com). Copies will also be available on request from the
Company secretary, Northern Foods plc, 2180 Century Way, Thorpe Park, Leeds,
LS15 8ZB. The Annual general meeting will be held at 10.30am on Wednesday 15
July 2009 at Thorpe Park Hotel, 1150 Century Way, LS15 8ZB.

END