5th Oct 2005 07:19
Greencore Group PLC05 October 2005 GREENCORE GROUP PLC CONTACT:PATRICK COVENEY, CHIEF FINANCIAL OFFICER TEL: +353 (0)1 6051003 FAX: +353 (0)1 6051103 BILLY MURPHY/JOE CARMODY, DRURY COMMUNICATIONS TEL: +353 (0)1 2605000 GREENCORE REBALANCES CONVENIENCE FOOD PORTFOLIO Greencore Group plc ("Greencore") today (Wednesday, 5 October 2005) announces anumber of development initiatives undertaken during the last two months. Thesecomprise the acquisition of a UK premium sandwich business, the disposal of theGroup's underperforming UK pizza business and the disposal of a non-core meatproducts business. 1. ACQUISITION OF OLDFIELDS LIMITED Greencore has extended its number one market position in the growing UK sandwichcategory through the acquisition of Oldfields Limited ("Oldfields") for aconsideration of €17.3 million. Oldfields is the leading producer of premiumsandwiches and paninis in the UK coffee bar sector, with annual output in excessof 25 million sandwiches. The business operates from a newly builtstate-of-the-art facility in East London and has significant available capacityto support both the expected growth in the Oldfields business and substantialgrowth in Greencore's existing business. The gross assets of the businessacquired were €5.4 million. This acquisition is consistent with Greencore's strategy of: - Extending its leadership positions in concentrated and growing chilled convenience food categories. - Complementing its strong positions with multiple food retailers by increasing its presence in 'alternative channels'. - Increasing its value to consumers and customers by delivering more 'crafted' premium offerings. 2. DISPOSAL OF GREENCORE PIZZA The Group has sold its UK pizza business to Pizza Canadian Limited (a newlyformed company established by members of the existing management team) for anominal consideration. Greencore Pizza was involved in the manufacture of bothtopped pizza and pizza crusts, primarily for the retail multiple market. Notwithstanding the operational improvement over the past 12 months, thisbusiness, as flagged in the Greencore 2004 Annual Report, has consistentlyfailed to deliver the performance or returns that the Group demands.Consequently, the Group has decided to exit this sector of the UK conveniencefood market and to focus its resources on other categories where the Group hasattractive market positions. The gross assets of Greencore Pizza as at 30September 2004 were €36.0 million. An exceptional charge of approximately €40million (net of tax) relating primarily to a write-down of asset values will bereflected in the September 2005 financial statements. 3. DISPOSAL OF FELDHUES The Group has also sold a small non-core food business, Feldhues GmbH ("Feldhues"), to O.N. Nederland B.V., a Netherlands based private investment group for aconsideration of €10 million. Feldhues produces a range of deli-style meatproducts and has operations in Metelen, Germany, and in Monaghan, Ireland. Thegross assets of Feldhues as at 30 September 2004 were €7.6 million. Greencore Group Chief Executive David Dilger said: "These developments represent important steps in the evolution of the Group'sConvenience Food portfolio. We are especially excited about Oldfields, whichwill accelerate our move to the premium end of the market and increase ourpresence in 'alternative channels'. Indeed, this move represents something of awatershed for Greencore, it being our first acquisition since Hazlewood in early2001. "Our decision to exit the UK pizza business, while not made lightly, reflectsthe determination of the Group to maintain rigorous financial discipline. Takentogether, these developments clearly signal our commitment to rebalance the UKportfolio towards categories where we can sustain strong leadership positions,satisfy growing consumer needs and deliver attractive returns on capital.'' ENDS CAROLINE BERGINGROUP COMPANY SECRETARYST STEPHEN'S GREEN HOUSEEARLSFORT TERRACEDUBLIN 2 5 OCTOBER 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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