The company behind brands like Pork Farms pies, Fox’s Biscuits and Goodfella’s pizza has announced a radical restructuring to shore up profitability.

Northern Foods said it would sell off 40% of the business to focus on its more lucrative frozen, pizza and ready meals businesses.

Sales of companies like Smiths flour milling would raise about £200m, the company said, which would be ploughed back into cutting debt and reducing costs.

The news came in disappointing year-end results which saw Northern Foods profits slump from £22.8m last year to a loss of £5m this year.

The year to 1 April saw turnover rise to £1.44bn, but operating profit fell 18% to £70m because of high energy costs and cut-throat competition.

But huge restructuring charges were incurred mainly by making redundancies, renegotiating debt and underperformance in the bakery and chilled divisions.

After the disposal of underperforming assets, the new company would have estimated revenues of £860m and operating profits of £57m.

The market was expecting the results, so the share price aws only down fractionally on the day, but a profits warning earlier in the year saw Northern Foods stock fall more than 30p to around the 100p mark.