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Negotiations fall through on Iceland Seafood UK sale
The seafood processor announced that negotiations based on a letter of intent (LOI) from 30 December last year had come to an end.
A spokesman for the business said: “Reference is made to announcement from December 30 on signing of LOI to sell Iceland Seafood UK Ltd. Negotiations that were based on the LOI were not successful and have come to an end.
“The board and management of Iceland Seafood will now evaluate their options and will communicate on next steps in the process when appropriate.”
Second round of talks
Iceland Seafood revealed it was in talks with a ‘respected industry player’ to sell a majority share of its UK business at the end of 2022. The parties involved aimed to complete the proposed transaction by 17 February 2023.
This was the second LOI penned by the seafood firm since it announced plans to drop out of the UK market in November last year, a decision brought on by reported challenges in the region impacting its third quarter financial results.
Iceland Seafood claimed its UK operation’s performance had eroded the group’s profitability to the extent that the board no longer felt it was justifiable to continue.
While the company concluded that its UK operation was no longer a strategic fit for the business, it said that the facilities and ‘strong management team’ in Grimsby could be a great addition to other companies in the sector.
Reported loss
Iceland Seafood reported the UK operation continued to be loss making with a normalised loss before tax of €9.2m (£7.98m) in the first nine months of 2022 – compared to a loss of €1.3m (£1.12m) for the same period last year.
Sales in Ireland for the first nine months of the year were in line with the same time as the previous year in value terms, but 13% lower in volume.
“Lower and more stable salmon prices helped the Irish operation in Q3, but whitefish sourcing was challenging at the same time, both locally in Ireland, from Iceland, and Scotland,” read the report.
“Continuing effects of a challenging external environment and operational difficulties negatively impacted the UK operation. Significant price increases of various input factors negatively impacted margins and led to further losses both with respect to prior periods and short-term outlook.”
