Sweet news for Greencore's profits with sale of UK plant
Greencore's dessert business could become profitable for the first time in 20 years after it sold one its UK dessert production sites yesterday.
Analysts said that savings from the sale of the factory should result in Greencore's remaining desserts business being profitable by the end of the 2013.
Proceeds of the sale will cut Greencore's debts from £262.4m (€325.4m) to £258.1m when it comes to report annual accounts for 2013, Liam Igoe, an analyst at Goodbody Stockbrokers, said after the sale was announced.
Greencore yesterday announced the sale of its chilled desserts facility in Minsterley, England, to rival Muller Dairy for £4.3m (€5.3m) in cash, plus stock.
The plant manufactures Cadbury branded desserts. Greencore acquired it last year as part of the buyout of UK foodgroup Uniq. The sale of the Minsterley plant is not expected to close until next January.
Greencore bought UK-based Uniq in a £113m deal that closed last September, with yesterday's sale highlighting the rapid pace of integration since then. Earlier this year, Greencore exited the Dublin Stock Exchange in favour of London. The bulk of the company's customers and sales are in the UK, though it continues to be headquartered in Ireland.
Results published at the end of May showed Greencore had increased revenue by nearly 50pc to £567.7m in 2011 and is forecasting strong growth in earnings per share, despite a cautious outlook.
Pre-tax profits for the six months to March 30 climbed 12pc to £19.2m.
Shares in Greencore were down 3pc yesterday in London, following the disposal news, at 72.5 pence each.