Australian firm Buderim Ginger has announced plans to sell its loss-making baking business.
“The board of Buderim Ginger Ltd has resolved to seek expressions of interest in the sale of the baking business,” the company said in a brief statement to the Australian stock exchange yesterday (25 June).
Go deeper with GlobalData
The Australian ginger group said the move would allow it to focus on developing its core interests. “This will enable the Buderim Ginger Group to focus on its core business in the areas of ginger, macadamias and its tourist destination,” Buderim said.
According to the company, its Buderim Baking Company subsidiary produces “a range of [frozen] premium savoury pastries” that are “distributed to prominent national customers in the Australian retail market”.
The unit has witnessed a decline in sales and earnings over the last two years, with the loss of key contracts.
In its most recent annual report, Buderim said 2011 was a “poor year” for the bakery business, which was hit by flood damage and the loss of a “large” third-party contract. During the year, the group saw sales drop 11% to A$19.8m (US$18.4m) from A$22.2m in the prior 12 months. The company booked a loss of A$220,000 in the year.
This decline accelerated in 2012, the company revealed in its full-year results released in February of this year. The unit saw sales drop a further 51% to A$9.7m, while profit fell A$1.6m to a total of A$1.8m.
“The downturn reflected in these figures was on the back of lost supply to the Brumby chains when the production was transferred to another producer,” Buderim said.
“The company continues to work on the restructuring of the baking business and is currently working with a number of customers to secure additional business,” the group added.
However, four months on, this restructuring process has evidently concluded with the decision to offload the business.
Buderim was not available for further comment at time of press.
