Zetar to sell baked snacks business
The confectionery and snack foods group’s interim results for the six months ended 31 October 2008 showed that Baked Snacks contributed sales of £1.5m, but its adjusted operating loss was £0.8m.
The Baked Snacks Company was created in May 2007 to acquire the assets of Britannia Biscuits, a manufacturer of low fat, low sugar, low salt biscuits and crisps. The move was aimed to take advantage of potential development and growth in the healthier snacks market, particularly the ‘baked not fried’ sector.
Baked Snacks was expected to make a loss in the first quarter of the year, according to Ian Blackburn, Zetar chief executive.
However, it has continued to “underperform” and Zetar will now dispose of it to focus on “continuing to grow the profitable Confectionery and Natural & Premium Snacks divisions”.
Blackburn said: “The expected improvement in trading in the second quarter to be driven by customer product launches did not materialise in the anticipated time frame.
“As a result of the further deferment of new business, allied with the general decline in the business climate, the Board has had to extend the timeframe within which Baked Snacks could be expected to make a profit.
“Whilst the Board remains of the view that the markets for Baked Snacks’ products have long term potential, it believes that the further investment and management resource that Baked Snacks’ requires can be used more effectively within other parts of the Group.”
Zetar said that discussions with a number of interested buyers are underway.
Company changes
It comes as a list of companies in the bakery and snacks sector are being forced to reassesses their position due to the current economic climate.
Last week the Real Good Food Company announced the consolidation of its bakery ingredients division, Renshaw, and its sugar division, Napier Brown Foods, into one unit, re-named Renshawnapier, based in Liverpool.
And this week, Premier Foods received a cash offer of €50m for its French speciality bakery business Martine Specialites from Financiere Martine, the vehicle of private equity groups Banexi Capital and Cerea Capital.
Martine became part of the Premier Group in March 2007 but it said it is not “aligned with Premier’s strategic focus on its business in the UK and Republic of Ireland.”
Meanwhile St Helens-based Pimblett and Sons bakery went out of business last month.
And Zetar, which is AIM-listed saw its share price dive in December after retail chain Woolworths went into receivership, owing it nearly £1m.
Zetar’s six month interim results showed EBITDA for the group was down 23 per cent to £2.7m, compared to £3.5m in 2007. However, EBITDA excluding Baked Snacks was down only 13 per cent to £3.3m.
