Belgium-based fruit-and-veg supplier Greenyard has revealed its decision over the future of its prepared-foods arm – a unit the company said in March it was considering selling.
The company said today (18 November) recent efforts to improve its profitability meant it would not have to sell its Belgian prepared-foods business, nor embark on a capital increase.
A possible sale of the prepared-foods unit, which supplies products from canned veg to pasta dishes, had been mooted in March as part of a wider “transformation” plan Greenyard had devised to boost sales and profits.
At the time, Greenyard said “continued pressure in the food-retail landscape”, particularly in Belgium and Germany, had weighed on its top and bottom lines.
Assets, including Greenyard’s Baja frozen-food plant in Hungary, have been sold and more than 300 employees let go.
Greenyard today described the retention of the prepared-foods business and the decision not to push ahead with a capital increase as its “stand-alone alternative”.
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It said: “The stand-alone alternative, without capital increase and without sale of the Belgian prepared activities, is the preferred option as it avoids dilution for Greenyard’s existing shareholders and allows Greenyard to preserve and use the full positive cash generation of its entire portfolio of activities for the further deleveraging of the group.”
Overall, Greenyard said it had “regained stability” in its sales, which, in the first half of its current financial year, stood at EUR1.97bn (US$2.18bn), versus EUR1.98bn a year earlier.
Covering the six months to 30 September, Greenyard gave a first-half adjusted EBITDA figure of EUR47.6m, compared to EUR41.2m in the corresponding period a year earlier.
Marc Zwaaneveld, Greenyard’s co-CEO, who was hired in February, said: “The transformation plan not only entails a cultural change, but it is also fostered by the combination of years of experience, industry knowledge and external new insights. This leads to an improved way of working, enhancing both the quality towards our customers and our internal quality. This will prove to be the stepping stone for Greenyard to take a leading role in the industry.
“However, we are not there yet. We are still in the midst of our transformation period. A transformation is naturally associated with variability and uncertainty, particularly in the initial phases of transformational periods. Nevertheless, even in this transformational period, we are confident that we can increasingly bolster our group for the future and will do this gradually over the upcoming periods.”
Greenyard’s first-half net loss from continuing operations was EUR44.9m, against EUR68.1m a year earlier.