Northern Foods said this week a fire at its Fletchers bakery in July cost it £5m in lost sales in the first half of its financial year.

Chief executive Pat O’Driscoll said Northern Foods is still in discussion with insurers over compensation after the fire burned down a third of the bakery.

Speaking after Northern Foods gave a trading update for the 26 weeks to 30 September, O’Driscoll told British Baker that it had had "good interest" from potential buyers of parts of its business. The company put 40% of its business up for sale in May (British Baker, June 2, pg 3), including Fletchers, Smiths Flour Mills and several pastry companies.

Northern Foods is also closing its unprofitable Trafford Park savouries bakery in Manchester. A consultation with employees over the plans is now complete and the site is due to close at the end of November, O’Driscoll said (see Friday Essay, pg 13).

Northern Foods said in its trading update that sales in its bakery division continued to decline. First half underlying sales in the disposal businesses declined by 6.7%, due to product and site rationalisation, as well as the Fletchers fire.

Overall group underlying sales declined by 1.1% on the prior year. Underlying sales in the businesses not up for sale grew by 3.5%.

Northern Foods plans to focus on five categories: pizza, biscuits, ready meals, sandwiches and salads, and Christmas puddings when the disposals are completed. Its deadline for that is next May.