Premier continues drive to cut debts
PREMIER Foods continued to reduce its debt pile yesterday as it announced the sale of its canned groceries operation to rival Princes, in a deal valued at �182million.
The sale includes two factories, at Wisbech in Cambridgeshire and Long Sutton in Lincolnshire, which together employ more than 1,000 people, and brands such as Crosse & Blackwell, Fray Bentos, Farrows and Smedley’s.
Premier has also granted Princes a licence to produce canned products such as baked beans and pasta under the Branston and Batchelors brands.
However, Premier’s factory in Bury St Edmunds, which includes Branston pickle among its product range, is not affected by the sale.
And the group’s is also retaining its Ambrosia canned desserts business, based at Lifton in Devon.
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Yesterday’s deal comes less than a month after Premier offloaded its meat-free business Quorn for �205m in its drive to reduce its debt mountain, which last June stood at �1.4billion.
The canned grocery operations being sold achieved sales of about of �334m and underlying earnings of �32m last year.
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Premier’s chief executive, Robert Schofield, said: “Selling the business simplifies our operations and allows us to concentrate our efforts on our current portfolio of great British brands.”
The deal also improves Premier’s earnings to debt ratio, following an acquisition spree in recent years that has included Hovis owner RHM and Campbell’s Soup in the UK and Ireland.
Liverpool-based Princes, which has grown from being an importer of canned fish into a supplier of products ranging from fruit juice and canned meat to microwave meals and sandwich spreads, will have annual revenues of �1.5billion following the deal and a workforce of 4.500 across 13 production sites.
