Goodman Fielder sells NZ meat and pizza units for up to $17 mln

Wednesday 8th January 2014

Goodman Fielder, the biggest food company in Australia and New Zealand, will net up to $17 million from the sale of its local meat and pizza businesses, as it continues to streamline its suite of brands, and will take one-time charges of up to $44 million.

The Sydney-based company will sell its meats business to Hellers, the Christchurch-based meat producer half-owned by Rangatira, and its pizza business to Papatoetoe-based Mommas Frozen Products, raising net proceeds of between $15 million and $17 million, it said in a statement. The cash will be used to repay debt.

As part of the sale of the meats unit, it will close its Frankton facility, which employs 125 people, and will pay out full redundancy if it can't find them positions at other Goodman Fielder or Hellers sites. That will cost about $8 million in closure costs, and the company anticipates impairment charges of between $32 million and $36 million from the two sales.

"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," chief executive Chris Delaney said. "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."

Goodman Fielder returned to profit last year after it completed a two-year restructure, selling assets and repaying debt.

The dual-listed shares fell 3.4 percent to 71.5 cents on the NZX, and were last at 66.5 Australian cents on the ASX. The stock is rated an average 'hold' based on 11 analyst recommendations compiled by Reuters, with a median target price of 75 Australian cents.

BusinessDesk.co.nz

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