Northern Foods jettisons pies to pursue ready-meals
pastry and flour divisions in order to focus fully on the core
pizza, ready meals and sandwich sectors of its snacking empire.
The £160m (€236m) deal, announced last week, handed over control of the pastry, speciality bread, cake and flour milling businesses to independent investment firm Vision Capital. The transition is expected to be completed by January next year.
After disappointing results last quarter, Northern Foods decided to dispose of the lower performing sectors in need of restructuring as well as those in lower margin categories. The businesses, which are hindering growth at the company are expected to be completely shed by the end of the next financial year.
Chief executive of Northern Foods Pat O'Driscoll said: "We can now focus all our attention on our core categories to build a competitive and resilient Northern Foods."
For the financial year ending in April this year, the assets to be sold enjoyed sales of £477m (€704.6m) and profit from operations before exceptional items of £7.9m (€11.6m).
Northern Foods, who own the Goodfellas pizza and Fox's biscuit brands, said last quarter it plans to reduce central costs by £12m (€17.7m) per annum next year and generate revenues of £200m (€294.8m) from the sale of the assets.
The money will be used to reduce debt and fund pension liabilities. The rest will be used to invest in growing the business.
