Shares in Northern Foods were down on the FTSE All Share in afternoon trading despite the company reporting a rise in sales in the third quarter ended 1 January 2011.

The group said that like for like sales increased 2.3 per cent in the period, with its Chilled range seeing sales growth of 9.7 per cent and the Bakery division reporting a rise in like for like sales of 5.0 per cent.

However the group's Frozen division saw like for like sales decline 17.2 per cent, a fall attributed by the company to the restructuring of its Goodfella's brand.

Net debt at the end of the period was reportedly similar to that at the end of the previous quarter, despite investment into automated technology for the production of its Fox's Biscuits.

Northern Foods reiterated that it was favour of a proposed merger with fellow food company Greencore, announced last November.

Simon Herrick, Acting Chief Executive of Northern Foods, said, "Overall, Northern Foods has continued to trade in line with market expectations, despite tough market and weather conditions. The commitment, resolve and initiative of our employees, even when faced with extreme weather conditions, helped us to deliver a good Christmas trading performance, whilst implementing major organisational change and the Greencore merger discussions.

"We remain well positioned for the uncertain and competitive market conditions which we expect during 2011, underpinned by our strong financial position and the benefits being realised from our new organisation structure."

By 16:10 shares in Northern Foods were down 0.80 per cent on the FTSE All Share to 61.50 pence per share.