Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Griffin's to ramp up exports under new ownership, CEO says

Griffin's to ramp up exports under new ownership, incoming CEO Taylor says

By Paul McBeth

July 23 (BusinessDesk) - Griffin's Foods, the maker of Gingernuts and Eta brand snacks, plans to lift exports to more than 50 percent of sales within five years by leveraging new owner Universal Robina Corp's links in southeast Asia, says incoming chief executive Alison Taylor.

Auckland-based Griffin's was sold to URC for $700 million this week, ending about eight years of ownership by Australian private equity firm Pacific Equity Partners. The company can use URC's networks in Asia to meet growing global demand for New Zealand-sourced food, Taylor told BusinessDesk.

"We're certainly expecting in the next five years doing more business globally, with over 50 percent coming from offshore," Taylor said. "The Asian market is the next natural stop for us."

The government is looking to increase the country's exports to 40 percent of the economy by 2025, and has tasked the Ministry of Business, Innovation and Employment to analyse food and beverage exports, which account for more than half of New Zealand's merchandise trade.

Local manufacturers exported about $287 million of snack foods in 2012 out of a total $1.72 billion processed food exports, according to a Coriolis report for the Food and Beverage Information Project published in January.

About a third of Griffin's $280.8 million in annual revenue came from exports in calendar 2013, up from as little as 2 or 3 percent of its $186.4 million in sales in 2006, when PEP bought the manufacturer. The Coriolis report ranked Griffin's the country's seventh-biggest processed food firm.

Griffin's has excess capacity at its two South Auckland plants, Taylor said. PEP said it had invested $180 million in the company over the course of its ownership to improve the manufacturer's efficiency. That included some $55 million it spent buying the Nice and Natural wrapped snacks business.

The Philippines food and beverage company will pay $100 million upfront, with the balance to be paid once the deal is completed, and will be funded from long-term debt financing and internal sources, URC said in a statement to the Philippines Stock Exchange. The sale needs Overseas Investment Office approval.

"The proposed acquisition is expected to transform Griffin's international growth strategy as it will benefit from URC's existing distribution networks across the Philippines and other Asia countries," URC said. "In addition, the acquisition complements URC's product portfolio, leveraging its distribution strength to sell a premium range of products in its home and international markets."

PEP tried to sell Griffin’s in 2011 after struggling to find a buyer. It was reportedly looking for a price in the range of seven to nine times earnings, which were about $108 million at the time. The sale to URC was at a multiple of 8.97 times earnings before interest, tax, depreciation and amortisation of $78 million.

The Australian private equity firm bought Griffin’s for $292.4 million in 2006 from French food group Danone at an enterprise value of $385 million

The sale comes after accounts for NZ Snack Food Holdings show the Griffin’s holding company made a capital return of $192 million in a share repurchase in the same year PEP refinanced the food manufacturer.

The group had interest bearing debt of $442.4 million as at Dec. 31, up from $234.6 million a year earlier, according to financial statements lodged with the Companies Office. The $274.5 million of bank debt matures in January 2016, while $167.9 million of mezzanine notes mature in January 2019.

NZ Snack Foods reported a 75 percent slump in profit to $5.1 million in calendar 2013, as its finance costs climbed by more than half to $23.8 million. Revenue fell 4.3 percent to $280.8 million. Gross margins were largely unchanged at 53 percent. Operational cash inflow more than doubled to $34 million, and the group held cash of $34.8 million as at Dec. 31.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news