Four years ago, meat and dairy giant Unigate was turning over the best part of Â£3bn and chalking up profits in excess of Â£140m. One of the UK's largest listed companies, the Unigate stable boasted the jewel in the crown of the British bacon industry and one of the country's largest liquid milk processing operations.
This year Uniq plc notched up sales of less than Â£1.4bn and plunged Â£116m into the red.
In a few months, it will be smaller yet, after the disposal of a raft of brands including Shape, Utterly Butterly and Vitalite to tackle soaring debt and further tighten its strategic focus'.
Whether Unigate's spectacular contraction is the story of the inevitable dismantling of an unwieldy, commodity-driven conglomerate or a disastrous tale of mismanagement and decline is a matter for debate.
What Uniq's long suffering shareholders want to know is whether what is left is just a pale shadow of its former self or a lean, mean fighting machine able to grow its share in the burgeoning convenience foods market.
For those who have watched the value of the company's shares slump from well over 500p to their current 160p over the period, it is perhaps hard to see Unigate's transformation into Uniq as the inevitable march of progress. As one City analyst observes: "The previous management progressively destroyed value in the business over the past 10 years. It's just one long tale of woe."
The gradual transformation of Unigate from a business with a finger in every pie to a company focused purely on chilled convenience food began in the early 1990s with the sale of a raft of non core operations, from car dealerships to a US restaurant business.
But the major strategic changes have come in the last three years, beginning with the purchase of Terranova and French businesses Marie Surgelé³ and Gé®©rale Traiteur in spring 1999. Next came the sale of the milk and cheese business to Dairy Crest in July 2000, the demerger of logistics arm Wincanton in May 2001 and the sale of Malton to Grampian Country Foods in October 2001.
While the French acquisitions have been widely condemned by the City as "major strategic mistakes" compounded by Uniq's self-confessed mishandling of the restructuring of its French operations, not all of the company's woes are entirely of its own making, say analysts.
Indeed, recent problems could be put down to a combination of bad timing and lousy luck.
"At the end of the day, the company found itself in the unfortunate position of being in two commodity businesses (milk and pigmeat) when the cycles of both were in the downturn at the same time," says Merril Lynch's Nick Sochovsky.
Exiting commodity areas and focusing on less volatile income streams was clearly the only sensible strategic move, as is the current decision to exit branded yogurts and spreads, he adds. As new boss Bill Ronald accepted last week, Uniq doesn't have the critical mass or marketing clout to get the best out of a brand like Shape, just as Northern Foods has recognised Ski and Munch Bunch would perform better in the Nestlé ³table.
The problem is, Uniq has an unfortunate habit of holding onto things for too long. "Only Uniq can be blamed for the mess Shape is in," said one analyst. "They chased volumes and destroyed margins. With spreads, it makes sense to exit while there is at least some brand equity left. Own label and branded businesses require completely different skill sets."
In the case of Malton, the market clearly moved faster than the management. The double whammy of foot and mouth disease and classical swine fever turned Malton into a ball and chain around Uniq's neck, losing the best part of Â£1m a month. By spring 2001, the only issue for debate was when it was going to be hived off and how much cash it was likely to lose before the proposed "industry wide solution" was found.
In October, the solution emerged in the form of Grampian Country Foods, which snapped up a business turning over half a billion for just Â£33.5m.
However, the writing was already on the wall for new boss Terry Stannard in September after the company warned profits would be substantially below' forecasts made less than two months previously, propelling chairman Nigel Stapleton into the hot seat after just three months on the board.
As executive chairman, Stapleton immediately launched a search for a new ceo, and announced a series of cost cutting measures to tackle mounting debt.
Former Compass executive Simon Atkinson was parachuted in to try to leverage some of Uniq's pan-European scale with a centralised buying programme and Shape was relaunched (again) to sweeten it up for a sale.
But the French business did not show signs of improvement and Stapleton admitted Uniq had "seriously underestimated the size of the challenge" in rationalising its French operations into one unit Â Marie-St Hubert. Management left in droves, new product development went out of the window and chilled and frozen food growth stagnated.
Recent encouraging performances from UK pre-pared foods and northern Europe were cancelled out by dismal figures from St Ivel and Marie-St Hubert, drag-ging the company into the red as the full year results were announced last week (The Grocer, June 15, p10).
So has new boss Bill Ronald been landed with a poisoned chalice or a golden opportunity to restore Uniq to its former glory?
The City is giving him the benefit of the doubt, but warns he has a difficult task. "Ronald appears to be looking at the business in a more dispassionate way than his predecessors," says one analyst. "There are still considerable problems in France, but elsewhere, he's got a business with potential for reasonable earnings growth by moving onto the same sort of platform as Geest and Northern Foods. The margins aren't great but there's growth and stability. At the moment, the business is bouncing around at the bottom. But there could be light at the end of the tunnel." n