Irish food company Greencore will exit the UK cake and dessert market following its agreement to sell its cake-making business in Hull, Yorkshire for an undisclosed amount.
The Hull plant, which makes packaged cakes for supermarkets, will be sold to Bright Blue Foods, headquartered in Blackburn, a company that holds supermarket cake licenses 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 the Dublin general meeting on Tuesday. With the gradual closure of its chilled desserts factory in Evercreech, Somerset, the sale marks the end of its cake and dessert business in the UK.
Led by CEO Patrick Coveney, the maker of prepackaged sandwiches, salads, soups and ready meals employs 16,000 people in 31 manufacturing plants. In the UK it supplies ready meals under its own brand to all major UK supermarket chains.
The decision to ditch cakes and desserts in the UK is part of a previously announced plan to streamline its portfolio in this market and coincides with a decision to invest more in the ready meals business.
The company had a financially tough 2017, with its annual November results showing a 74% drop in pre-tax profits to £ 12.4million.
At the time, he highlighted the “difficult” trading conditions in the UK cake and dessert industry, which he said were “characterized by churn and high levels of inflation”.
The company recorded a one-off charge of £ 16.5million related to the closure of Evercreech.