Northern Foods, the manufacturer behind Fox’s biscuits and Pork Farms pies among others, has warned investors that it will have to cut more costs in the second half of the year if it is to meet profits forecasts.

Although underlying sales showed year-on-year growth of 3.4%, the company said trading conditions were challenging with growing input costs.

Margins for the first half of the year to 1 Oct were expected to be “broadly maintained”, according to a trading statement.

It read: “Performance across our ambient and frozen businesses remains robust.

“Whilst the chilled division is now operating as a unified business and is beginning to show progress, the process of improving profitability to an acceptable level will take time to achieve.”

Pat O’Driscoll, chief executive, said: “I am encouraged by the good progress we are making to restructure and refocus the business towards our goals.”