Uniq bows out with £1.1M desserts deficit

Greencore’s £113M takeover is expected to be finalised in the coming weeks, and one analyst believes it is only a matter of time before the 26-acre Minsterley factory in Shropshire is closed.

Recent restructuring has seen Uniq focus on its premium desserts business, including its Müller and Cadbury contracts, with the loss of some 500 jobs at Minsterley.

Analyst Julian Wild of Rollits told FoodManufacture.co.uk: “I don’t see that Minsterley can be a viable site going forward. I’m not saying that the chilled desserts business isn’t worth having, because it probably is, but I cannot imagine that Minsterley has a long-term future employing 100 people, because it’s a big site.​

“Once you’ve downsized a site like that to 100 people it just doesn’t look like a viable site going forward.​

“I would be pretty certain that, in due, course they would exit altogether. There may be commercial reasons why, given the Müller Cadbury contract, they’re not in a position to exit even more quickly.”​

He added: “Desserts are not really what Greencore is about. They’re making the best of a bad job with Minsterley, which clearly wasn’t their motivation when buying Uniq.”​

Decision within 12 months​​

Shore Capital analyst Darren Shirley said Uniq had an 18-month rolling contract to produce Müller and Cadbury desserts. He suggested it was unlikely that Greencore would consider investing in Minsterley and building up the desserts business, but was reluctant to speculate about a closure of the site.

“That’s a question that will be answered over the next 12 months,”​ he said. “There’s a significant amount of business that has been exited within Minsterley. The question that Greencore will address is whether they can operate that site profitably with a small amount of business going through, and large fixed overheads. I would suggest that question marks do remain, and it is a challenge.​

“I think what they would be focused on in the short term is just trying to get some profitability from the site.”​

Food to Go sales up​​

Uniq’s desserts sales fell by 8.2% in the six months to June 30, which the company blamed on “the loss of some low-margin everyday desserts business, following the price increases pushed through in 2010 and as a result of the planned exit of cottage cheese”​.

It added: “Positive progress was made in sales of premium desserts, reflecting the more favourable market dynamics of this sub-sector, while the sales of Cadbury chocolate desserts were flat.”​

The £1.1M loss from desserts compared with a £1.8M deficit for the same period in 2010.

As a whole, Uniq said it had reaped the rewards of a pension fund restructuring exercise, and other reorganisation. Underlying profits rose by 47% to £4.7M, aided by a 4.9% increase in Food to Go sales.