The company behind Ginsters pasties hopes closing two factories, with hundreds of job losses, and the sale of a third, will help turn its finances around.
National food-to-go giant Samworth Brothers shut the loss-making Kensey Food desserts plant in Launceston, Cornwall, earlier this year, which had provided work for 650 people.
Last year it closed its Brooklands Bakery, in Surrey, which it only bought in 2016, and which employed around 250 people. That site made artisanal bread products.
And earlier this year the business, which is based in Melton, in north Leicestershire, sold its Blueberry desserts subsidiary in Leicester.
Samworth Brothers will post losses for 2018 when its new accounts are published next month.
Chief executive Flor Healy said off-loading the three plants was part of a strategy to move out of the dessert and bread making sectors and concentrate on its core areas of sandwiches, savouries and ready meals as well as its branded ranges.
It is also looking to start up new businesses and could even acquire others.
In a far-reaching interview with BusinessLive Mr Healy outlined Samworth’s plans to get back into the black while, for the first time, reaching annual revenues of £1.1 billion.
Mr Healy, who has been in the post 18 months, said: “Our accounts will be out at the end of September and they show a pretty horrible picture in terms of profitability.
“The business has been making no money, seeing significant profit declines in the last two years, and significant write-downs with costs associated with the closures.
“But this year is significantly better and I would be quietly confident for the rest of the year and the years ahead.”
He revealed there was an agreement in place for Samworth Brothers to buy out Higgidy – the £25 million turnover maker of posh quiches, frittatas and sausage rolls – in the next few years after taking a 25 per cent stake earlier this year.
Samworths bought into the West Sussex snacking and pies business this summer to help its growth plans prior to the acquisition. Higgidy employs around 300 people and is based near Brighton.
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Mr Healy said: “Higgidy is well positioned for the future with its premium baked savoury products, and plays into the vegetarian and vegan market, which we see as complementary to our business.
“It’s a younger consumer – more female as well as younger families – and we see it as a business we can grow and develop, and have agreed with the shareholders to take control of the business in time.
“The arrangement works for both parties. The shareholders are very committed to the business and like the support we can give them.
“We like what they are bringing, with the entrepreneurial feel they have, and have no doubt they will grow the business significantly over the next two to three years.
“Turnover is £25 million, and we hope that will grow by 10-15 per cent a year over the next five years, taking it to £50 million, by which time we will buy the business out.”
Samworth Brothers is the Ƶ’s second biggest maker of sandwiches and wraps, its main area of business, and the market leader for savouries and pasties.
Mr Healy said they were also the Ƶ’s number one producer of classic, potato-based ready meals, and a big producer of meat products such as hams, pates and even pigs in blankets.
The business has several factories in its Melton Mowbray hometown and in Leicester, and also owns the Ginsters and West Cornwall Pasty businesses, Soreen malt loaves and the SCI-MX sports nutrition business.
Other brands include Walker and Son pork pies, Dickinson and Morris pork pies, and Walkers sausages.
In all the business employs around 10,000 people, including 8,000 in Leicestershire.
Mr Healy, who grew up on a dairy farm in Ireland, spent 14 years as chief executive at Kerry Foods before coming over to England.
He joined Samworth Brothers nine months after his predecessor left, and said he had long-known about the business’s strong reputation.
He said: “It’s a big business and a business with a fantastic heritage, with strengths around its assets and people, and its ethos and customer base.
“Like any business it has its challenges, including some significant ones, but right now it’s all about the future and where this business will be in three to five years time.
“We have had challenges in the last few years and the level of profitability declining, and we have closed two businesses – Brooklands Bakery in Surrey, and Kensey Foods in Cornwall – and it has impacted on hundreds of colleagues, who we have been very respectful of.
“We have been forced to make some difficult decisions.
“We have also sold Blueberry, so the core of the business is very strong and well set for the future.
“It is about making decisions and reinvesting in areas where we can have a big market share in the future.
“I have been in the food business since 1984 and the competition is always fierce, with customers always demanding more, and that’s life.
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“I think our outlook would be that we try and strengthen our core businesses through a combination of internal capital investments and, if the opportunities present themselves, acquisitions.
“We are also keen to develop a culture of entrepreneurship within the business and start some new businesses within the next 12 months.
“The board is passionate about starting up businesses in fresh food, playing into our core skills.”
Mr Healy said, while not being complacent, they did not see a no-deal Brexit as a big threat.
The biggest concern, he said, was the drop in the value of sterling and its impact on food prices.
He said: “The amount of raw materials that come from outside the Ƶ is significant, but not overwhelming.”
He said the Samworth family was “hugely” committed to the business.
He said: “I would not say I was brought in to turn the business around.
“It’s really a case of “business as usual” and everything we are doing now is setting the business up for the next five years to making it the best in the Ƶ and the envy of the industry.
“That’s hugely energising. We have a lot of work to do we can be very optimistic about the future.”
