Finsbury confirms Grain D’Or closure – 250 jobs at risk
The firm expected the closure to be completed by December 2 this year. It followed a consultation with staff at the factory, which began in August.
Grain D’Or – which has two sites in London – was historically loss making, according to Finsbury. The brand produces pastries, American muffins, speciality breads and is a major importer of Normandy butter and Canadian blueberries.
The business reported an operating loss of £3.33M in its most recent financial results, despite sales of £28.5M.
“The closure means that the company will benefit from not supporting the losses associated with the factory,” said Finsbury.
‘Losses associated with the factory’
“This fits with the company’s strategy of focusing investment behind profitable product niches to drive long term market growth and value within specialty bakery.”
Finsbury said that Grain D’Or’s failing performance reflected the competitive and cost challenges experienced across the industry.
The business also lost two large contracts since the year-end, impacting its financial performance further.
Exceptional cash costs associated with the closure of Grain D'Or could reach up to £10M, said Finsbury, spread over a period of up to seven years. However, costs were expected to more likely be in the region of £6M.
The company would also benefit from the cancellation of planned capital investment programmes in Grain D'Or, which it claimed were significant.
‘Future growth, despite current market conditions’
Finsbury added: “Following the closure, the company’s lower cost base and greater focus on profitable markets means that it is well positioned for future growth, despite current market conditions, and to benefit from any future upturn in the market
“The company will continue to invest in support of its strategy to drive efficiency and profitable scale and is confident that it is well-placed to maintain its leading position in the market.”
Meanwhile, last month, Finsbury has grown profits and sales in its latest financial results, despite “current challenges facing the industry”.
The company saw profits rise by 4.2% to £17.4M, on a like-for-like basis, in its preliminary results for the year ending July 1 2017. Adjusted profit before tax was up 5.6% to £16.6M, compared with last year.
