Uniq axes its desserts firm ahead of Greencore buyout
UNIQ, the British ready-meals firm being bought by Greencore, is to close one of its businesses with the loss of 350 jobs.
The firm will exit its Everyday Desserts business, which had been loss-making for a decade, a move that will cost in the region of £10m (€11.44m).
Uniq said the move came after an "in-depth review" of its desserts division and it had "decided to focus on its growing premium dessert and Muller/ Cadbury desserts businesses and to exit its loss-making Everyday Desserts business".
"This will result in the transfer of certain selected premium desserts sales from Uniq's Minsterley site [in Shropshire] and the cessation of production at Uniq's Everyday Desserts business unit at Minsterley in the first half of 2012, with the loss of approximately 350 jobs.
"The Everyday Desserts sales being exited are approximately £36m. The total cash cost of this restructuring is estimated to be approximately £10m, including capital investment."
The move had been expected. It was widely accepted that if the company could have sold the business, it would have done so some time ago.
Greencore could not be reached for comment but chief executive Patrick Coveney had previously said his company would "support" whatever Uniq ended up doing with the business. Greencore's takeover is expected to close next month.
Analysts broadly welcomed the move. Shore Capital's Clive Black and Darren Shirley described the announcement as "a welcome piece of tidying up. We deem this change to be a very positive development [for Greencore].The main prize of the acquisition of Uniq by Greencore is not Uniq's dessert operations but its Food To Go operations.
"The sandwich, salad and prepared foods element of Uniq, the acquisitions of which remains subject to competition clearance, gives Greencore a materially better representation with Marks & Spencer, plus scope for material cost benefits in procurement, central overheads and production costs, while materially bolstering medium-term cash generation," they added.
Davy stockbrokers' Aiden O'Donnell agreed, saying: "This announcement does not come as a surprise given the difficulties Uniq has had in its desserts business over the years. It follows from its announced exit from the premium differentiated yogurt market and the cottage cheese market."
Greencore closed up 3.83pc at 60c.