Northern Foods is not losing any sleep over the turmoil at M&S, new chief executive Pat O’Driscoll has insisted.

Speaking as the company announced a sharp drop in full-year profit, but modest sales increases, O’Driscoll said: “We have a successful relationship with M&S, which represents a third of our business.

“As for cost cutting if someone else is in charge, all of our major retail customers are looking at cost cutting and driving efficiency.”

Profits were dented by the loss of a major contract, disruption caused by the hot summer and inflation on raw materials, causing a 23% slide in profit in convenience.

However, grocery performed well, driven by a good summer barbecue season for Dalepak, good growth at Green Isle Pizza and a recovery in biscuits.

Pre-tax profit after goodwill amortization and exceptionals plunged 28.7% to £75.4m on sales up 8.5% to £1.54bn in the 53 weeks to April 3. Underlying retail sales were up 2% in the first seven weeks of the current financial year.