NORTHERN Foods, parent firm of Hollands Pies of Baxenden, has served up rising sales but said that profits had been hit by a revamp across the business.

Northern, which makes foods such as quiches, sushi and pizza, said sales to its five biggest customers -- M&S, Sainsbury's, Tesco, Safeway and Asda -- jumped 7.5 per cent during the year. Frozen pizzas saw particularly strong sales, while a Chinese takeaway range for M&S also went down well, the group said.

Group turnover for the year to March 31 increased from £1.29billion to £1.34 billion helped by new acquisitions which contributed £63.9million.

But its restructuring programme, which is seeing it upgrade or move facilities in an effort to cut costs, helped knock £25.4million off profits.

Pre-tax profits for the year came in at £74.8million against £94.5million last time.

The restructuring programme is scheduled to finish mid next year and the company expects to see operating profits benefit by around £13million in the financial year starting April 2002. Chairman Lord Haskins said: "We have made a sound start to the current year, sustaining the sales momentum we built up last year.

"Our investment programme is delivering increasing benefits and continues to enhance our competitive position by reducing costs and improving our capacity for innovation."