Iceland Seafood International to exit UK value-added market, close Grimsby plant after racking up huge losses

UK – Iceland Seafood International (ISI) is set to exit the UK value-added market and close its Grimsby area operations, with the board saying it “no longer feels it’s justifiable to continue.”

Iceland Seafood UK invested in operating facilities in Grimsby and merged its operations from Bradford and Grimsby into this location.

The investment and decision of the merger were completed in March 2020, just before Covid-19 started.

Subsequently renovation and installation of the factory were very much affected by Covid, Brexit, along with difficulties in overall operations.

Iceland Seafood UK said its processing factory in Grimsby, employing almost 200 people, was no longer deemed “a strategic fit” for the company.

In August, ISI reported how the plant was taking longer to break even than anticipated, but was hopeful the level will be reached in the first half of 2023.

The company had previously planned to rectify sales prices and grow the business with current and new customers.

However, Iceland Seafood International will now pull out of the UK and focus on its European operations.

Chief executive Bjarni Ármannsson said the costly red tape following the UK’s exit from the European Union had hurt the company’s ability to import fish and seafood for processing and sale.

He explained that the UK market has become more difficult post-Brexit in terms of paperwork.

The National Federation of Fishermen’s Organizations (NFFO) said last year that the sector had been “sold out” by the Brexit deal.

In a statement, the company said: “The UK’s performance has eroded the group profitability to the extent that the board no longer feels it’s justifiable to continue. This has also meant that management resources have to a large degree, been devoted to this situation instead of capturing growth opportunities elsewhere.”

“Although it has been concluded that the UK operation is not a strategic fit for Iceland Seafood anymore, the excellent facilities and strong management team in Grimsby can be a great addition to other companies in the sector.”

The group’s overall Q3 results showed its profitability rebounded in the period after a difficult first half of the year.

The group generated a normalized profit before tax (PBT) of EUR 2.3 million (US$2.4 million) in the quarter and EUR 500,000 (US$519,000) in the first nine months of 2022, versus EUR 3.4 million (US$3.5 million) and EUR 8.2 million (US$8.5 million) in the corresponding periods of 2021. 

The UK operation continued to be loss-making, recording a normalized loss before tax of €9.2m in the first nine months, compared to a loss of €1.3m in the same period last year.

Excluding results from Iceland Seafood UK, ISI has revised its outlook range for 2022 normalized PBT to EUR 3 million (US$3.1 million) to EUR 5 million (US$5.2 million).

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