Northern Foods rejected City suggestions that it would fail to get the £200m it was seeking for the pastry, cakes, speciality bread and flour milling businesses.

Remaining disposals were "progressing in line with plans to achieve £200m total proceeds" said Northern, as it unveiled a 38% fall in pre-tax profit on continuing and discontinued operations to £16m from £25.7m a year before. Sales fell 2.4% to £645.1m.

It blamed the profit drop on continued "challenging" trading conditions, the move of some seasonal sales into this half of the current financial year and the sale of the NFT distribution business.

However, the NFT sale produced gross proceeds of £51.2m and, taking into account discontinued operations and £17.7m of exceptional items, produced a £30.5m profit in the first half - up from £14.4m a year before.

Still up for sale are Northern’s chilled pastry, cakes, speciality bread and flour milling businesses, with the aim of focusing on the remaining pizza, biscuit, readymeal, sandwich and salad and Christmas pudding operations. The businesses to be sold off accounted for 37.4% of total revenue of £683.2m in the first half but only 5.2% of the £26.7m operating profit.

The operating profit of Northern’s bakery division slumped by 65% to £6.6m from £18.6m a year before because of poor performances by both the businesses up for sale and those Northern plans to keep. The bakery division’s sales fell 10.2% year-on-year to £196.5m, on the back of a 7.6% fall in sales volumes and a 2.6% fall in average net selling prices.

Northern has withdrawn its long-running objection to an attempt by the Melton Mowbray Pork Pie Association to win Protected Geographical Indication (PGI) status in the EU for Melton Mowbray pies.