Greencore exits ‘challenging’ UK cakes and desserts business
Irish food company has sold its Hull cake factory to Bright Blue Foods
Greencore chief executive Patrick Coveney. Photograph: Cyril Byrne/The Irish Times.
Irish food company Greencore will exit the UK cakes and desserts market following its agreement to sell its cake manufacturing business in Hull in Yorkshire for an undisclosed sum.
The Hull factory, which makes packaged cakes for supermarkets, will be sold to the Blackburn-headquartered Bright Blue Foods, a company that holds supermarket cake licences for brands such as McVitie’s and Mars.
Greencore, which is listed on the London Stock Exchange, announced the move ahead of its scheduled trading update and Dublin agm on Tuesday. Together with the phased closure its chilled desserts facility in Evercreech in Somerset, the sale marks the end of its activity in the UK cakes and desserts sector.
Led by chief executive Patrick Coveney, the Dublin-headquartered maker of pre-packed sandwiches, salads, soups and ready meals employs 16,000 people in 31 manufacturing facilities. In the UK, it supplies own-label convenience food to all of the major British-owned supermarket chains.
The move to exit cakes and desserts in the UK is part of a previously stated plan to rationalise its portfolio in that market and coincides with a decision to invest further in the ready meal side of the business.
The company endured a financially bumpy 2017, with its full-year results in November showing a 74 per cent dip in pre-tax profits to £12.4 million.
At the time, it highlighted “challenging” trading conditions in the UK cakes and desserts business, which it said was “characterised by business churn and high levels of inflation”.
The company recorded an exceptional charge of £16.5 million relating to the Evercreech closure.