Efficiency improvements at convenience food maker Uniq's Shropshire factory will help drive a "significant recovery" in UK performance, the company said.
Uniq yesterday revealed the Minsterley desserts plant had recorded an operating loss of £11.9 million.
However, the company anticipates the factory will get back into profit in the fourth quarter of the new financial year.
Uniq purchased the plant from Northern Foods for £16.5 million in May 2004, pledging to transform it into a "state-of-the-art" production facility.
The plant was unable to cope with the subsequent increase in business.
Chief executive Geoff Eaton said service levels had now improved and labour utilisation was back "at the right sort of levels" but the company was behind schedule in dealing with wastage.
He said: "We've had high raw material waste because of the mix of products, so we're having to reconfigure part of the factory."
Mr Eaton spoke as the group overall reported a major fall in profits across all but its southern Europe operations and announced plans to sell its French spreads and Belgian salads operations.
In the year to March 31 company-wide pretax profit totalled only £4.6 million, hurt by a 52 per cent fall in operating profit combined with higher interest expenses.
That compared with pretax profit of £22.6 million the year earlier.
Operating losses in the UK widened to £11.6 million from £5.5 million the year earlier, due to the problems at Minsterley.
In northern Europe performance was break-even, versus an operating profit of £9 million in the prior year.
Company-wide sales dipped to £ 825.1 million from £879 million.
The southern Europe division made an operating profit of £25.2 million.
Collectively, the French spreads and Belgian salad businesses accounted for 12 per cent of group revenues last fiscal year, and their sale will enable Uniq to pay down its balance sheet.
The company said it instead intended to focus on its convenience food businesses with the greatest growth potential, namely in the UK, where performance was already improving.
The company's Minsterley factory employs around 800 people and produces a range of trifles and chocolate desserts.
Chairman Nigel Stapleton said: "We expect a significant recovery in UK performance this year, sourced from underlying market growth, cost reductions, improvements at Minsterley, and the price increases secured at the end of the last financial year."
Shares were unchanged at 130p.