Lion ponders fish giant Young’s sale after choppy year

Reports said private equity firm Lion Capital has appointed financial advisers Rothschild to evaluate Grimsby-based Young’s, and its sister firm The Seafood Company, in a strategic review of their parent, Findus Group.

Lion bought Findus in 2008 for £1.1bn. However, the food group saw turnover slide nearly four per cent in 2010 and it slumped to £151.6m losses in part because of heavy financing costs.

The group blamed tough 2010 trading on a snowy winter, hot summer, weak consumer sentiment, surging inflation and stiff competition.

Findus is also hamstrung by a heavy debt burden, which stood at £721.3m at the end of 2010, forcing it to amend its banking covenants in April.

Young’s, which dates back to 1805, employs 1,700 people in Grimsby, home to its manufacturing and new product development centre of excellence.

Its Grimsby operations are the biggest seafood hub in the UK, producing around 65,000 tonnes of fish products a year.

Reports claimed Young’s could be worth more than £150m, with the The Seafood Company worth about £300m.

Findus brought the two operations together earlier in the year, under the Young’s Seafood Ltd banner.

The seafood business has combined sales of more than £600m and over 3,200 staff. Lion is also believed to be toying with selling Findus’s Nordic operations, the market leader in Norway, Finland and Sweden.

Julian Wild, director of the food group at Hull-based law firm Rollits, said a break-up of Findus and sale of Young’s makes sense.

“I would have thought it was very possible,” said Mr Wild. “It has always struck me as a somewhat ill-fitting group of branded and own label, frozen and chilled seafood businesses.

“Findus has moved away from its Grimsby heartland, centralised everything in London and recruited a lot of very expensive heavy hitters. I don’t think that has worked out.

“It needs to be split up because I don’t think Findus hangs together as a terribly coherent grouping. There will be a fair degree of interest if it does get split up.”

Mr Wild added former management could be serious contenders to buy Young’s, as well as trade and international players.

Findus declined to comment.

The managing director of Fox’s Biscuits is quitting to head Premier Foods’ grocery business. The UK’s biggest food producer yesterday announced Graham Hunter, 47, will join in 2012 to lead its £1bn grocery business.

Mr Hunter joins from 2 Sisters Food Group, which bought Fox’s parent Northern Foods earlier in the year for £342m.

Fox’s is based in Batley, West Yorkshire and also has sites in Staffordshire and Lancashire.