11 June 2007 - The Company announces today the disposal (“Disposal”) of the assets and goodwill of its Fish Division, Five Star Fish, its added value frozen fish business based in Grimsby in Lincolnshire, to the privately owned British Seafood Ltd for an initial consideration of £35 million payable in cash at completion, of which £0.75 million will be held in Escrow for a period of nine months. Completion of the Disposal is expected to take place on 12 June 2007.
Five Star Fish is a leading supplier of added-value, prepared frozen fish to the foodservice sector. Real Good Food acquired Five Star Fish in May 2004 from private ownership. Since then the business has grown sales from £19m to in excess of £30m today. Profits have also increased significantly during this period. The Division has gross assets of £17.6 million, whilst its turnover for the year to 31 December 2006 was £29.1 million, which equated to approximately 11.6% of group turnover. Operating profits of approximately £4 million, equating to 29.9% of group operating profit.
The Company intends to use the net proceeds from the Disposal, which after tax will be approximately £27 million, to lower the level of group debt.
Commenting on the transaction Pieter Totté, Chairman of Real Good Food, said:
“I would like to thank Danny Burton and the team at Five Star Fish for their contribution to the development of The Real Good Food Company over the past three years. They will be able, by joining forces with British Seafood, to move more rapidly towards their visions for the business. Their period under RGFC ownership has been mutually beneficial and I believe they will provide British Seafood with an ideal platform for its development into the added value seafood marketplace in the UK and Ireland.”
Commenting on partnering British Seafood, Danny Burton, Managing Director of Five Star Fish, said:
“British Seafood is the ideal partner for Five Star Fish to be working with in the future. We know the team at British Seafood well and have worked with them for a number of years. Opportunities for the further development of Five Star Fish will be increased by this deal”.
Mark Holyoake, Chief Executive of British Seafood, said:
“I would like to welcome Danny and the team at Five Star Fish to the British Seafood group of companies. I have admired this business for a number of years and feel that under our ownership the business can move to another level. It has a very exciting future with us.”