There is growing concern and bafflement at Northern Foods' apparent inability to find buyers for parts of its business it no longer wants.
The troubled food manufacturer, which analysts expect to report a 40%-50% fall in pre-tax profit to £13.5m-£15m when it releases its interims next week, has still only divested one of the businesses it earmarked for sale in May as part of a bid to achieve a greater focus on branded food. It still has Park Cakes, Fletchers Bakeries, Grain D'or, Kara Foods, Smiths Flour Milling, Pork Farms and Riverside Bakery to sell. Its Trafford Park Bakery is to close by the end of the year.
"I would have expected a bit more action by now," said one analyst. "RHM and Associated British Foods should be interested in its cakes and speciality breads business, even though its Fletchers bakery burnt down in the summer, and I would have expected it to sell Trafford Park Bakery instead of closing it."
Northern Foods could increase the attraction of the businesses to buyers by offering management buyouts, said Simon Peacock from Catalyst Corporate Finance. "There is the possibility of an MBO at its Park Cakes business," he added.
However, it remains a mystery why the businesses had failed to attract buyers, he said. "The timing is good because private equity houses are queuing up for food deals and the businesses should be perfect for small or mid-market private equity. It is also strange that RHM has remained quiet."
Another analyst said: "We would be disappointed if Northern Foods did not make announcements on the disposal within the next three or four months."
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