Morrisons buys out Cranswick at Farmers Boy

Cranswick and Morrisons have agreed that Morrisons will acquire fresh meat plant Farmers Boy Deeside, after Cranswick sold its 49% interest to the supermarket.

The North Wales factory was acquired by the two companies in July 2010 as part of a joint venture. Since then they have invested around £30m in the site, doubling its size to 175,000 square feet and increasing its capacity and capability. The gross assets of Cranswick's share was reported as being worth £6.2m.

The site employs 600 people and produces 1.5m packs of sliced ham and poultry products each week.

Martyn Fletcher, Morrison’s group manufacturing director, said: “We have worked closely with Cranswick over the past 18 months to grow this site in Deeside and would like to thank them for their fantastic support in developing a state of the art facility.”

In February Morrisons acquired the Vion Winsford meat packing facility as part of a the supermarket’s plan to invest £200 million over a three year period to support the growth of the business.

A spokesman for Cranswick said that the sale had been in negotiation for a while, but was finalised in the last week. He said that this had been the long term plan for the plant, which produces exclusively for Morrisons. The supermarket is due to launch a revamp of its cooked meat range this summer and much of the new range will come from the Farmers Boy site.

The announcement came as the pork processor reported a ‘pleasing performance’ in the 4Q, with underlying like-for-like sales up 10% in the year to 31 March, reflecting positive contributions from all product categories.

The announcement came as the pork processor reported a ‘pleasing performance’ in the 4Q, with underlying like-for-like sales up 10% in the year to 31 March, reflecting positive contributions from all product categories.

The good results followed a challenging time for the processor, with the company reporting a £5.3m loss in pre-tax profits in the half-year to September 2011.

The Group has invested in excess of £20m in infrastructure during the year, allowing it to improve operational efficiencies and to launch new product ranges which has helped drive volume. However this has had some impact on operating margin which will fall below figures achieved in the previous financial year.
 
A statement said that strong cash generation from operations in the final quarter will lower the net debt by the  year-end, with the proceeds from the Farmers Boy sale reducing this further. It said that the group was in a sound financial position, with committed, unsecured facilities of £100m which provide generous headroom going forward.

>Morrisons unveils abattoir investment

>Q3 figures show good progress for Cranswick

>FSA does U-turn over Cranswick exports to China

>Cranswick's profits drop due to higher costs

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