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Albert Fisher set for pounds 40m sell-off

ALBERT FISHER, the perennially struggling food group, promised further significant disposals yesterday as the new management team attempts to reduce debts and put the group on a more stable financial footing.

Reporting increased first-half losses of pounds 53m after pounds 56m of exceptional charges, Terry Robinson, chief executive, said Albert Fisher would slim down to focus on four divisions where it is either number one or two in growth markets. These are chilled cut lettuce, chilled cut fruit, chilled fish and frozen green vegetables.

At least eight other businesses will be sold, including several seafood businesses, a chilled salad business and the group's stake in the Freshpoint produce distribution operation in the US.

The expected pounds 40m proceeds will be used to reduce debts, which stood at pounds 165m at the interim stage. Mr Robinson, who saw a non-executive director quit over disagreements on strategy in January, is also planning to cut costs and beef up management.

The problem with Albert Fisher is that a company with over pounds 1.2bn of annual sales has operating profits of just pounds 6m and a market value of pounds 6m.

Going forward, the plan is to try to boost operating margins to 5 to 6 per cent within 18 months; an admirable aim, but achieving it has eluded a series of management teams.

At just 5p the shares are completely bombed out and as an investment represent a bold, all-or-nothing bet. Investec Henderson Crosthwaite is looking for pre-exceptional profits of pounds 11.5m in the full year, although these are likely to be marred by further write-offs. The shares are a recovery play, say analysts, albeit a risky one.