United Biscuits is paying pounds 21m for Dalgety Snacks which, in the year to June, sold pounds 25.8m worth of crisps and extruded snacks in the Netherlands, Germany and France. That gives it 9 per cent of the extruded snacks market and 14 per cent in crisps.
The acquisition furthers United Biscuits' aim of expanding its snack business in Europe. David Hearn, managing director of its snacks business, KP Foods, said: 'The company's portfolio and market position complement UB's existing activities in the Dutch market, and elsewhere in Europe, and provide substantial growth opportunities.'
Richard Clothier, Dalgety's chief executive, said its snacks and consumer foods division - it also owns the Homepride and Greens' brand - was to be purely a British business. The group did intend to expand in Europe, but only in its pet foods and food ingredients businesses - both areas where it has made a number of acquisitions in the past year.
He added that he did not believe it was sensible to take on the food giants like Unilever. Instead, he preferred to supply them with food ingredients.
The disposal was announced as the group revealed a 7 per cent rise in pre-tax profits to pounds 120.1m for the year to June. The rise was due to a pounds 9.6m contribution from acquisitions and, at the operating level, profits from the existing businesses fell pounds 5.5m to pounds 124.9m.
The foods business was badly affected by competition among snack manufacturers and pressure from retailers. Operating profits from that division dropped 13 per cent to pounds 57.4m, despite a 9.6 per cent rise in sales to pounds 651m. Golden Wonder's market share rose from 16 to 18 per cent, however, while Spillers, the pet-food company, also made good progress.
The acquisition of the feeds business Oldacre helped the agribusiness division to shake off the effect of a slump in European pig prices and profits rose pounds 2.7m to pounds 34.8m.
Earnings per share were 36.7p, up 3 per cent, and the dividend is increased in line to 21.15p via a 13.15p final.
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