Northern Foods has put almost half its businesses up for sale in a radical restructuring that will see about 150 head office jobs axed.
The sell-offs include the Palethorpes pies, pasties, sausage rolls and Asda brand quiches factory employing 700 people at at Market Drayton in Shropshire.
The factory is part of Northern's chilled division, which recently shut a plant at Evesham with the loss of 400 jobs.
The Leeds-based group yesterday announced plans to dispose of operations accounting for about 40 per cent of its revenues as it looks to focus on products such as Goodfella's Pizzas and Fox's Biscuits, which has a plant at Uttoxeter in Staffordshire.
Northern hope to raise £200 million from the sale of divisions such as NFT Distribution and Smiths Flour Milling, as well as the chilled pastry products business that takes in Palethorpes, which will see 9,000 of its 20,500 staff transferred out of the company.
The sell off follows a three-month business review as Northern looks to deal with healthier eating trends and disappointing sales figures.
It also announced a 27 per cent fall in pretax profits for the year to April 1 - down from £62.2 million a year ago to £45.1 million.
Revenues were up from £1.42 billion to £1.44 billion the previous year as a strong performance in Northern's frozen division was offset by weaker results in chilled foods and the bakery arm, which were hit by "major energy cost rises and a tough competitive environment". Northern cut the dividend from 9.05p a share to 41[2044]4p.
Chief executive Pat O'Driscoll said the job axe at the head office in Leeds were part of ongoing cost savings and not a result of the announcement on the sale of the various businesses.
Northern said that the new smaller company would be more profitable than the current one despite having 40 per cent less revenues and 45 per cent fewer staff.
But Ms O'Driscoll warned: "This year is clearly one of change and transition for Northern Foods as our disposals progress.
"The first half is likely to be weaker than the comparable period last year because of tough trading but we are confident that the plans we have announced will create a leaner and more profitable business going forward."
The slimmed down Northern will focus on five key categories: pizza, biscuits, ready meals, sandwiches and Christmas puddings.
Ms O'Driscoll said Fox's was central to Northern's future despite recent speculation that it may be sold. Fox's has been hit by healthier eating and intense competition recently, particularly from United Biscuits.
The firm said it hoped the disposals would be "well advanced" in 12 months. Hargreaves Lansdown Stockbrokers analyst Keith Bowman said restructuring should allow the group, which previously issued two profits warnings, to concentrate on growth instead of "fire-fighting".
"That said, light at the end of the tunnel still seems some way off and investors now have to suffer further short to medium-term pain in the form of earnings dilution before they can fully contemplate any recovery," Mr Bowman said.
