Northern Foods has posted a 7.9% rise in convenience food sales but said disappointing results from its biscuits division would hit its grocery performance in the first half.

For the year to March 31 pre-tax profit before goodwill amortisation and exceptional items fell 3.5% to £97.5m down from £101m.

The group which makes own label ready meals, quiches and desserts for leading retailers such as Marks and Spencer, said sales from continuing operations were up 5% to £1.42bn.

Chairman of Northern Foods, Peter Blackburn, said biscuit trading would dampen the performance of its grocery unit in the first half, despite its attempts to speed up new product development, cut costs and raise prices.

It said sales in the first seven weeks were up 7.6% overall, helped by the timing of Easter and new business gains, and up 9.5% from its five largest customers.

The press has speculated that the group is looking to sell various non-core operations. In its statement Northern Foods said it would continue to review its portfolio to ensure a focus on activities where it “can achieve and retain competitive advantage and a strong customer franchise”.

The group said the sale of its Ski and Munch Bunch brands raised £145m.