Greencore disposes of Ministry of Cake
Convenience food producer Greencore has announced the disposal of its foodservice desserts business Ministry of Cake in its half-year results.
The business has been disposed of in a management buyout for an upfront cash consideration of £8m and deferred consideration of up to £3m as Greencore focuses on its main business.
Elsewhere, it reported that group revenue is up 9.3% on a like-for-like basis to £619.8m in its results for the 26 weeks to 28 March. It reported its Convenience Foods division saw like-for-like revenue growth of 9.6%, while group operating profit was up 14% to £37.2m.
The company said its food-to-go business had “maintained the strong revenue momentum seen in Q4 2013” with both US and UK businesses delivering growth. The UK Prepared Meals and Grocery businesses have also delivered “steady performances”, while Greencore announced plans to make a multi-year investment of £30m in its Northampton facility to meet orders for a new contract in the chilled sandwich category.
Its US food-to-go business will also be a focus with the acquisition of Lettieri’s LLC - a manufacturer of frozen food-to-go products for the convenience channel - a £6m investment in its Florida facility to manufacture frozen food-to-go products and the announcement of a greenfield sandwich manufacturing facility in Rhode Island for £20m. The latter will facilitate the closure of existing leased sites in Newburyport and Brockton, Massachusetts.
Patrick Coveney, chief executive, said: “The business delivered a strong first-half performance, driving 18.6% earnings per share growth. Our strategy of focusing on the food-to-go market is working well in both the UK and the US.
"Over the past six months we have stepped up our strategic investments in Minneapolis, Jacksonville, Rhode Island and Northampton to support confirmed new business with several large customers. These investments, as well as the strong trading momentum that we are seeing across our group, have left us well positioned for further growth in the months and years ahead.”
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