GREENCORE’S STATED aim to concentrate on its UK and US convenience food businesses moved a step further yesterday, with the announcement that the company intends to sell its Dutch convenience food business.
While the company declined to disclose a sum for the sale, Greencore is expected to net approximately €12 million through the disposal.
Convenience Foods Europe, a subsidiary of European investment firm Parcom, is to buy the business subject to regulatory approval. The deal is expected to be completed by August 30th.
The proceeds from the sale will be used to reduce group net debt, the company said.
Greencore’s Dutch business, known as Greencore Continental, represents about 5 per cent of the company’s overall convenience foods division. Turnover for the year ended September 25th, 2009, was €58.2 million, while the business had net assets of €12.7 million.
Greencore Continental is a market leader in the Netherlands, where it produces sandwiches, chilled sauces and chilled pizzas for the European market. It operates two facilities in the Netherlands, at Liessel and Alphen aan den Rijn.
Chief executive Patrick Coveney said yesterday that the intended disposal was in line with the company’s strategy of developing a leading market position in convenience foods in the UK, and growing its convenience food business in the United States.
Interim results for Greencore in May showed that group sales rose by 2.1 per cent to €434.5 million for continuing operations in the six months to the end of March.
Its core convenience foods division, which accounts for the vast majority of Greencore’s business, recorded a 6.1 per cent rise in like-for-like sales. The US convenience foods business achieved 27 per cent sales growth in the six-month period.
Yesterday’s announcement follows the sale of Greencore’s malt and water operations to facilitate the company’s increasing focus on convenience foods.
