Convenience food manufacturer Greencore has announced a €17m deal to divest its shareholdings in two molasses trading businesses based here in Ireland as it continues to sell off the remainder of its legacy assets from when the company used to be known as Irish Sugar.

On Tuesday, Greencore said it had struck a deal with London-based United Molasses to sell its 50% stake in two businesses, Premier Molasses and United Molasses Ireland, for a cash price of £15.6m (€17m).

United Molasses already owns the other 50% stake in these businesses, meaning it will assume full control once the deal is finalised. Greencore said it would use the cash windfall from the deal to strengthen its balance sheet.

The core activities of these two companies is the importation and distribution of animal feed across the island of Ireland. Premier Molasses and United Molasses Ireland operate three port located tanker terminals in Ireland to import and store cane and beet molasses. The businesses sell and distribute molasses to a range of animal feed and industrial customers in Ireland.

Sales decline

Greencore made the announcement as it released a third quarter trading update, which showed the group’s sales plunged 36% in the three months to the end of June to £240.6m (€265m) as a result of the negative impact of COVID-19.

Greencore said its sales of convenience foods, which comprises products like chilled prepared meals, chilled soups and sauces, and Yorkshire Puddings, grew by almost 2% over the three month period to just under £117m (€128m).

However, the company’s sales of food-to-go products such as sandwiches, salads, sushi and chilled snacks collapsed by as much as 53% during the quarter below £124m (€136m).

Greencore is the largest sandwich maker in the UK and Ireland. Sales of food-to-go products normally account for about two-thirds of the group’s turnover. Greencore said it is starting to see some recovery in its sales of food-to-go products as restrictions on movement and travel have eased in the UK and Ireland.

Despite such a challenging period, Greencore chief executive Patrick Coveney said the company had strengthened its customer relationships during the COVID-19 lockdown.

“We remain confident in the relevance and attractiveness of the food to go channels and categories that we serve. In addition, we are well positioned for new business opportunities and a return to growth as the pandemic subsides,” said Coveney.