GFF
08/01/2014 09:01
ASSET
REL: 0901 HRS Goodman Fielder Limited
ASSET: GFF: Divestment of Meats and Pizza Businesses in New Zealand
ASX/NZX ANNOUNCEMENT
8 January 2014
GOODMAN FIELDER CONTINUES STRATEGY TO OPTIMISE PORTFOLIO WITH PROPOSED
DIVESTMENT OF MEATS AND PIZZA BUSINESSES IN NEW ZEALAND
Goodman Fielder has continued its strategy to optimise its product and brand
portfolio, today announcing it has agreed proposals to sell its Meats and
Pizza businesses in New Zealand.
Goodman Fielder CEO, Chris Delaney said the divestments represented the near
conclusion of the company's strategy to refocus on its core categories where
it has market leading, profitable positions.
"Over the past 18 months, we have successfully prioritised our product
portfolio with a number of business divestments, including Integro, NZ
Milling, Copperpot and most recently the Biscuits business. On finalisation
of the sales of Meats and Pizza businesses, we will have largely completed
our divestment programme which will enable the company to focus our resources
on our core categories."
Proposed Sale of Meats Business
Goodman Fielder has agreed a proposal to sell its Meats business to Hellers
Ltd.
The proposed sale is subject to an employee consultation process and the
consideration of any feedback received as part of that process.
Goodman Fielder's Meats business processes and markets small goods meat
products to the New Zealand market including, Kiwi bacon and ham, Brooks Deli
continental meats and bacon, Hutton's luncheon, bacon and ham, Sizzlers
pre-cooked smallgoods and Milano cooked continental meats.
Hellers is a New Zealand small goods manufacturing company based in
Christchurch which manufactures, markets and distributes a wide range of
hams, bacons, sausages and luncheon products across New Zealand.
The consultation process includes the proposal to transfer Goodman Fielder's
current meat processing activities at Frankton, Hamilton to Hellers' sites in
Christchurch and Auckland. Should this proceed, the site at Frankton will
be closed.
"We have had to make the very difficult recommendation to close the facility
at Frankton," said Mr Delaney.
"Our strategic commitment is to focus our capital and marketing expenditure
on our core categories and our Meats business is not core to Goodman Fielder.
The proposal to sell also reflects the very difficult trading environment
and market conditions which have existed for the Meats business for some
time. We explored a number of alternative possibilities; however, none of
these were viable which has led to this decision.
"We are consulting directly with employees impacted by this decision. Where
possible, they will be provided the opportunity for redeployment to fill
vacancies at other Goodman Fielder sites across New Zealand and potentially
at Hellers. Employees who are not able to be redeployed will receive their
full redundancy provisions as well as an employee assistance program,
outplacement program and careers workshop."
"We understand the impact these decisions can have on our people and our
immediate priority is to ensure that our employees are supported through this
process," said Mr Delaney.
There are 125 employees at the Frankton site.
Proposed Sale of Pizza Business
Goodman Fielder has also agreed a proposal to sell its Pizza business to
Mommas Frozen Products Ltd, subject to consultation with nine employees that
work on the line at its Irvines pie factory in South Auckland.
The Pizza business' primary brand is Leaning Tower which produces mainly
fresh chilled pizza, including pizza bases and snack sized frozen pizza.
The transactions of both proposed sales are expected to be completed on 31
March 2014 subject to the completion of the employee consultation processes
and satisfaction of conditions.
Net Proceeds
Total net proceeds from both divestments are expected to be in the range of
NZ$15 million to NZ$17 million, including inventory, and net receivables and
payables. Net proceeds will be used to reduce net debt and further
strengthen Goodman Fielder's financial position.
As a result of the divestments, Goodman Fielder expects to record a non-cash
impairment charge after tax against the Meats and Pizza businesses of in the
range of NZ$32 million to NZ$36 million. The impairment charge, together
with site cash closure costs relating to the Meats business of approximately
NZ$8 million, will be recorded as significant items in the company's FY14
interim accounts.
* * * * * * *
For further information contact:
Martin Cole
Director, Corporate Affairs
+61 2 8899 7272
For New Zealand media enquiries contact:
Ra Fletcher
Communications & PR Manager
Goodman Fielder NZ Ltd
+6427 705 9742
End CA:00245878 For:GFF Type:ASSET Time:2014-01-08 09:01:05
