UK – Iceland Seafood International (ISI) has finalized an agreement to sell its UK division to Espersen, a prominent Danish seafood producer known for its value-added products sold extensively in the UK retail sector.
The completion of this transaction will see Espersen taking full ownership of Iceland Seafood UK, marking a significant development in both companies’ strategic directions.
Bjarni Ármannsson, CEO of ISI, explained the rationale behind this decision, stating that after facing four challenging years in the UK market, the company had chosen to divest the UK business, incurring a substantial loss in the process.
The sales price for the 100% share has been set at US$1,266, resulting in a sales loss of approximately US$411,000.
Ármannsson expressed confidence in the decision, emphasizing that it was in the best interest of Iceland Seafood as a business and its shareholders.
He acknowledged the relentless efforts made to turn the UK business around but admitted that success had remained elusive due to the unforgiving market conditions.
Ármannsson further reassured that the interests of ISI’s employees and customers would be well-served within Espersen AS, a company with a strong position in the UK value-added seafood market.
The decision to sell the UK business comes after ISI had initially announced its intent to retain it in February, following two unsuccessful attempts to find buyers.
The decision was made approximately three months after the company first expressed its desire to exit the UK market.
Previously, ISI had confirmed that plans to sell a majority stake in Iceland Seafood UK had fallen through. The company had cited the UK subsidiary as no longer fitting into its strategic objectives, with its performance in the UK negatively impacting group profits.
Meanwhile, ISI recently published its first-half results, revealing that continuing high salmon prices in Q2 had adversely affected its operations in Ireland and Ahumados Dominguez in Spain.
Despite this setback, the company reported group sales of US$241.9 million) in the first half, marking a 7% increase from the same period in 2022. However, sales experienced a slowdown in Q2, declining by 7.6% compared to the previous year.
In terms of financial performance, ISI reported a net loss of US$16.8 million) for the first half, a significant increase from the US$3.42 million loss recorded in 1H 2022.
Notably, the loss from discontinued operations of the UK subsidiary during this period amounted to US$16.38 million, which included an impairment charge of US$9.77 million related to the divestment of the business.