There's a well-known saying reverberating around the head offices of Northern Foods at the moment - it never rains but it pours. At 10.27am on Sunday morning, a fire ripped through its Fletchers Bakeries site in Sheffield, which employs 650 people and produces a wide range of bakery products for the multiples, food retailers and foodservice sector.

Northern Foods is still assessing the impact of the fire. Hilary Baker, director of communications for the supplier, says: "Initial reports indicate that five of the 14 production units are untouched by the fire and further investigations may reveal that one of the buildings on the site was not affected." The firm is in talks with customers and hopes to resume production in the untouched building.

But whether it sorts things out quickly or not, the fire is just the latest kick in the teeth for a firm that has had a truly miserable year.

In January, the company warned that rising energy costs and high promotional expenditure in its biscuits division would mean that its full-year pre-tax profit would be lower than expected. In March, there was another profit warning, with the supplier this time admitting that full-year pre-tax profit would be hit by poor sales in its bakery, biscuits, chilled and pastry divisions, and by rising energy costs. Just two months later, the company's prelims revealed a full-year pre-tax profit to 1 April of £45.1m, down from £62.2m the year before. At the same time it announced a radical restructure of its business: a 'for sale' sign was hoisted over its cakes and speciality breads, chilled pastry products, NFT Distribution and Smith's

flour milling businesses, the aim being to focus on the five key

categories of pizza, biscuits,

ready meals, sandwiches and Christmas puddings.

Then there's its long-running battle with the Melton Mowbray Pork Pie Association against protected geographical indication (PGI) status for the Melton Mowbray name.

But the clouds could have a silver lining if the firm manages to offload the businesses it has put up for sale, which represent 40% of its turnover. One food manufacturing analyst says: "Northern Foods needs to reassure the market and its shareholders that its cost-cutting initiatives are bearing fruit and that it has had reasonable interest in the businesses for sale."

However, if it fails to raise any interest, the opposite scenario is more likely. One analyst says: "It could get worse for Northern Foods if it fails to sell the businesses or raise the £200m it estimates would be generated from the sale."

There has not been much speculation over who could be eyeing the units. Private equity group Phoenix Equity Partners is rumoured to be close to buying Northern Foods' transport arm, NFT Distribution, while cake manufacturer Finsbury Food Group and convenience specialist Greencore have both been touted as interested parties for parts of the business.

There's possibly an element of schadenfreude on the part of potential buyers. "Northern Foods' most important businesses for sale are cakes and speciality breads and chilled pastry products," says one analyst. "However, the competition may just decide to sit on its hands and watch it suffer instead of making a purchase."

But the failure of the businesses to sell probably has more to do with the businesses themselves.

"A number of these businesses have been for sale for several years and have not raised buyers," adds another. "This might make other buyers unwilling to take them on."

This week's fire, which a spokeswoman for South Yorkshire Fire and Rescue Service described as "devastating", certainly won't have helped. "Factory fires are never good news, but when it's part of a business you're trying to sell sooner rather than later, it's particularly bad," says one analyst.

Its chilled pastry division

could prove equally unattractive to potential buyers, given the protracted battle with the Melton Mowbray Pork Pie Association over PGI status. Northern Foods' appeal, lodged with the European Court of Justice, could take two years to resolve.

"Melton Mowbray pork pies are one of the firm's key production lines," says a food manufacturing analyst. "If there are restrictions on names and production, it could put off buyers."

Another adds: "The management team is under pressure.

They need to reverse the bad news sooner or later, re-establish relationships with customers and consumers and build up the business again."latest results

Analysts were disappointed that Northern Foods did not provide an update on how the sale of its non-core businesses was progressing at its annual general meeting on Wednesday (19 July).

Although Anthony Hobson, chairman of Northern Foods, said that the company's focus for the year would be to restore margins through its disposal programme, and a spokeswoman told The Grocer that the sale was "progressing", analysts had been hoping for something more substantial.

One analyst said: "This is a company that needs to try very hard to regain market confidence, so we need some hard news sooner or later."

However, analysts were encouraged by news that underlying sales in businesses that are not part of Northern Foods' disposal programme, for the 13 weeks to 1 July, rose by 4.5%. Total underlying sales increased

by 1.6%.

Hobson also reiterated to shareholders that current trading remains difficult. "As expected, trading conditions continue to be very competitive and margins remain under pressure," he said. "As we indicated in May 2006, this trading environment and changes in customer delivery preferences, from the first to the second half year, are anticipated to result in first-half profits being behind those of the comparable period."