2004 press releases

Northern Foods plc (‘Northern’) has agreed to sell the Cavaghan & Gray Seafood (‘C&GS’) chilled and frozen fish business to IFP Holdings, a subsidiary of Icelandic Group Plc (‘IFP’), for a cash consideration of £12.6 million.

C&GS procures, processes and/or manufactures added value fish products, particularly coated white fish and Scottish salmon, which are sold principally under the Marks & Spencer and Waitrose retailer brands. It also processes high quality fish for other food manufacturers, including Northern. The net assets to be disposed of are £13 million plus £2 million of goodwill, of which £1.8 million has previously been written off to reserves. The proceeds will be used to reduce Group debt.

C&GS has two factories, one at Grimsby which employs around 240 people and the other at Aberdeen employing 150 people. All these employees will transfer to IFP under TUPE*. It is expected that the sale will be completed later this month.

Northern Chief Executive, Pat O’Driscoll, commented: “C&GS has good facilities, products and customers, and an excellent team of people. However, Northern is a relatively small player in the UK fish market and we felt that it was in the best long-term interests of the business and its employees to sell it to a company which has real focus and scale in this area. IFP is a leading Grimsby-based fish products company, which is already a major supplier to M&S, and can realise synergies with its other operations.

This disposal continues the process of focusing Northern on its core strengths which we have been pursuing over the last eighteen months. It follows the disposals of Fox’s Confectionery, the Batchelors and Beck Smith grocery operations, the Emile Tissot foodservice frozen ready meals business and the Minsterley fresh chilled dairy products operation.”

^{* Transfer of Undertakings (Protection of Employment) Regulations 1981}