The sale of a pies and pasties factory employing around 1,000 people in Shropshire is moving closer, it has been revealed.

Leeds-based Northern Foods is aiming to dispose of its flour milling, cakes, speciality bread and chilled pastry divisions - and the business yesterday said it had received good interest in all four areas.

The chilled pastry division includes the Palethorpes pies, pasties, sausage rolls and Asda brand quiches factory at Market Drayton.

Northern Foods agreed to sell its distribution business in July to a management-led, private-equity-backed buyout group for £51.2 million. In addition the company is also aiming to complete the further, divisional, sales.

Finance director Jez Maiden yesterday said the firm had a number of potential bidders lined up. He said: "The other four disposals, flour milling, speciality bread, chilled pastry and cakes businesses, are now under way.

"We have the information with potential bidders and we are expecting to have successful sales on each of those projects. We've got good interest across all four."

Northern is attempting to offload unprofitable and non-core parts of the company to halt a slide in profits.

In May the company said it planned to sell around 40 per cent of its business and in August it announced plans to close a bakery in Manchester with the loss of about 690 jobs.

The company said the site, which produces a range of chilled pastry products, made losses of more than £3 million in 2005/06.

Its closure was seen as part of preparations for the sale of the chilled pastry division, including the Palethorpes plant. A spokeswoman for Northern Foods said it was too soon to predict any impact of the planned division disposal of the division on jobs at Palethorpes.

In a trading update yesterday Northern Foods said trading conditions remained tough - and said first-half profit would be in line with its expectations.

Northern, which makes Goodfella's pizzas, Fox's biscuits and Pork Farms pies, also revealed it was on track to cut its central costs by at least £12 million a year by 2007/08.

Chief executive Pat O'Driscoll said: "As expected, the trading environment has been very competitive. The first half profit will be in line with expectations."

Analysts estimate the firm's first-half pre tax profit will be around half of last year's £25.7 million.

The company said full-year results would depend heavily on performance in the season-ally busier second half.

It added that warm summer weather had boosted sales in its chilled and frozen division but hit sales in its bakery business, as did a fire at one of its plants.

Mr Maiden said the firm's overall first-half margin was likely to decline in line with market expectations.

Analysts said with a heavily weighted second half it was too early to tell if the firm would meet full year forecasts.