Bedwas-based food manufacturer Peter’s Food Service, better-known as Peter’s Pies, has sold its factory site in a £5 million deal.
The company will not be moving and will lease the site, with an option to buy it back after ten years.
The money from the sale will help fund a revival plan to turnaround the company’s fortunes.
The business suffered a £890,000 operating loss in its last financial year ending in May 2017.
As part of the plan, the company has developed a new range of low-fat products under a new brand.
Its new Nurish hot-filled bake products contain less than 400 calories and are being aimed at health-conscience millennials.
Two years in development the new product is currently on trial at supermarkets and is currently exceeding sales expectations by three-times.
The operating loss is a result of a number of factors, Managing Director Mike Grimwood explained.
Currency fluctuations following the Brexit vote has seen the cost of materials at home and abroad rise.
Mr Grimwood said: “Since the vote [to leave the European Union] you’ve seen currency decline substantially and whether it be cost of imports or the cost of domestic supplies meeting export prices, we saw about £4m of on-costs and that hurts, quite simply.
“You then have to try and get that back from your retailers, we’re about two-thirds retail business, and you had that marry a time of extreme competitiveness which we’ve seen with the likes of Asda, Tesco, Sainsbury’s.
“Up until now we have always been able to get the prices back from supermarkets, but you’ll have then seen price-intense competition with Aldi and Lidl gaining market-share and a tough fight between the major retailers and the discounters.
“Nobody is into giving up price increases.”
Mr Grimwood said competitors have responded by increasing volume, but Peter’s has decided to go in a different direction by diversifying its product range to include healthier alternatives.
He said: “A couple of years ago we sat down and said what are the strategic areas we wanted to focus on. One of them was health. No matter which way you cut it, savoury pastry is high in fat and it’s going to have a health impact.
“At that time we just saw the introduction of the sugar tax and we were sitting there thinking ‘if you’ve got a sugar tax, how long before we’ve got a fat tax’.
“How do we set about finding different products? How do we change the paradigm of our business?”
One of the changes was to stop the manufacture of pastries for supermarkets’ own-brand to slim down the business and concentrate on new markets for its healthier products- such as schools and the NHS.
Earlier this year the company announced around 100 job losses as a result, a decision that Mr Grimwood described as “painful”. He said: “It is our Dunkirk. We had to make sure the rest survived so we can rebuild. We lost 100 but we kept 600.”
The £80m company has not abandoned its traditional market and will still continue to make ‘full fat’ pies and pasties under the Peter’s brand.
However, Mr Grimwood said he would be “delighted” if, over the next five years, half of the factory ended up making the new product lines and the company could get back to the staffing levels of earlier this year.
Peter’s also has plans to bring out other healthier alternatives under different brands, with much of the innovation led by head of culinary development Simon Waite.
Mr Grimwood said: “It’s all to his credit. We met him just over two years ago and we hired him as he sees products in a different way. We were very fortunate.
“We had a classic case of somebody who had worked in quite big organisations but couldn’t get his ideas through those organisations.
“He’s arrived somewhere smaller where he can get his ideas through and we as a business have benefited from that.”
An earlier version of this article incorrectly stated that Peter’s had suffered a £2.6m pre-tax loss in its last financial year.