Shropshire dairy takes £20m hit after restructure
THE value of a Shropshire dairy is likely to take a £20m hit as a result of a scale back in production, it was revealed today.
Uniq, which operates the Minsterley site, announced last month it was dropping production of its Everyday desserts business to focus on higher margin products.
The decision is expected to mean the loss of around 350 jobs at the dairy. This comes on top of a further 50 job losses as a result of the factory ending the production of yoghurts.
In its latest interim results statement today, Uniq said the restructure would leave just 100 people employed at the Shropshire factory and the plant would focus solely on the production of Cadbury and Muller chocolate desserts.
“The carrying value of assets at Minsterley (£47m as at June 30, 2011) will reduce by approximately £20m as a result of the asset write-off associated with both the Yogurt and the Everyday dessert business units,” said the company in its statement.
The company opted for the restructure of its Desserts operation after sales fell by 8.2%, largely as a result of the loss of some low margin everyday desserts business. This followed price increases pushed through in 2010 and the exit of its cottage cheese production.
It said the Premium desserts business offered greater scope, largely due to the popularity of the sector and the high margins it attracted.
“Despite the overall fall in Desserts sales, the level of loss in this division reduced again to £1.1m compared to a loss of £1.8m for the same period last year,” said Uniq.
The firm, whose shareholders have approved a takeover by Irish food group Greencore, said the half year to June 30, 2011 had seen an improvement in trading performance and the transformation of the group’s balance sheet thanks to a successful restructuring which removed a disproportionately large pension deficit.
Operating profit before significant items and group costs improved by 47% to £4.7m (2010: £3.2m) on the back of improved trading in its Food to Go division and as a result of the restructuring within Desserts.
