Uniq, the embattled convenience food group, has announced that it is considering the sale of two of its divisions as it looks to refocus its struggling business.
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The company today reported a weak set of full-year results (reported elsewhere on the site) and CEO Geoff Eaton said that part of the recovery plan was to focus on a smaller number of convenience foods businesses which it judged to have the highest potential for significant profit growth and shareholder value creation.
“Consequently, we have decided to explore the sale of our French spreads and Belgian salad businesses. Collectively these businesses accounted in the financial year ending March 2006 for 12% of group revenues. Belgian salads generated an operating margin of 12% and French spreads has the highest margin and is the largest contributor to profits in the Southern Europe. Both businesses have been significant and consistent contributors to the group’s performance,” Eaton said.
He added that the company would seek to minimise financial risk through de-leveraging the balance sheet. The UK pension deficit will be supported by Sterling cash balances rather then Euro denominated operating profits and future payments towards reducing the deficit will be sourced from these balances rather than from operating cashflows.
“Growth will be underpinned by our recovery plans in the UK, Netherlands, Germany and Poland and the potential in our convenience business in France,” a statement said.
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By GlobalData“The board believes there is significant opportunity for adding value through the increase in focus on this narrower and more relevant field of activity, supported by a strong balance sheet and an experienced management team.”
