Northern Foods Plc. said it has ended supply of most of the Marks & Spencer (M&S) product lines produced at its Fenland Food ready meals facility and that it plans to mothball the Fenland Foods site.
The company said the stopped products, amounting to about 45 million pounds of sales, represent the majority of production at the Fenland facility in Grantham, United Kingdom.
It said the site operated at break-even profitability for the year to March 29, 2008, adding that the company, along with M&S, have mutually agreed that the site should be mothballed.
Northern Foods said it will begin consultation with the 730 Fenland employees Tuesday on a proposal to cease production and mothball the facility from August 2008.
The company said it does not expect the mothballing proposal to materially impact materially its pretax profit before restructuring items but said there will be a one-off cash restructuring cost and a non-cash write-down of asset value, which will be reported in the 2008/09 financial results.
The Fenland site had a book value of 24 million pounds as at March 29, 2008.
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