Booker sells bacon firms to Unigate
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Booker, the food group, yesterday announced the sale of its two bacon businesses to Unigate for pounds 20.25m.
The sale will be used to reduce Booker's net debt and will cut the group's year-end borrowing levels by between 10 and 15 per cent unless the price is adjusted on completion of a thorough checking of the accounts.
In the year ended 31 December 1994, the turnover of the businesses, Stocks Lovell Limited and Lovell & Christmas (Ulster) Limited, was pounds 83.7m and pre-tax profits were pounds 2.4m. The businesses are thought to have made lower profits and may only have broken even in 1995.
Charles Bowen, Booker's chief executive, said: "The sale marks our exit from the bacon and pork processing businesses at a satisfactory price. We believe that with our increasing focus on food distribution, fish processing and agribusiness, it is more appropriate that they join Unigate, which is already a strong force in this industry."
Mr Bowen added that group sales for the year as a whole were satisfactory, up 13 per cent on the previous year and 6.5 per cent ahead on a like-for- like basis.
Booker's shares rose 6p to 364p after the sale announcement and the trading up-date.
Unigate's finance director, John Worby, said that the Irish business of Lovell & Christmas had not been doing very well. He declined to comment on what steps the group would be taking to mitigate the downturn but said the intention was to expand the group's pig meat business and not to contract it. "We see some good synergies and growth opportunities from the deal," he said.
Mr Worby added that it was "too early" to say whether jobs at the Irish or UK plants would be affected.
The sale of the bacon businesses will leave Booker with just three small pre-packaged food businesses in its portfolio - Turner's pies and sausages, Buckingham Foods and Headland Foods. Booker's finance director, John Kitson, said there were no immediate plans to sell these businesses. "They are trading reasonably well and all are profitable," he said.
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