Carr's Group has sold Silloth Flour Mill as part of a £36m deal to sell its food division – Carr's Flour Mills – to Whitworth Holdings.

The sale will be worth £24.9m after adjustments for working capital and net debt. It says the disposal will allow it to concentrate on its remaining interests in agriculture and engineering.

The Carlisle-based company, which changed its name from Carr's Milling Industries to Carr's Group last year, will use the cash to return £16m to shareholders in the form of a special dividend and use the remaining £8.9m to strengthen its balance sheet.

The share price rose strongly following the announcement to the London Stock Exchange yesterday morning.

Carr's chief executive Tim Davies said: “The sale of Carr’s Flour Mills represents an exciting stage in Carr’s strategic development.

“At a time of increasing competition and volatility in the flour market, consolidation is essential and inevitable. We look forward to an exciting future focused on delivering growth in our higher margin products and services within the agriculture and engineering divisions.”

Carr's operates a second flour mill at Kirkcaldy in Scotland, described as the "most advanced in the world" when it opened in 2013.

It manufactures 10 flours – Strong White, Strong Brown, Wholemeal, Very Strong Canadian White, Self-Raising, Plain, Malty Seeded, Breadmaker Strong White, Breadmaker Wholemeal and Sauce Flour. Sales of the sauce and breadmaker flours soared after they were praised by TV chef Delia Smith.

Martin George, chairman of Whitworths Holdings, said: "Carr’s Flour Mills is a great fit geographically and will give us access to the south east, north of England and Scottish markets that would otherwise not be available and means we have national reach."

Carr’s has 50 UK sites, a robotics business in Germany and animal-feed plants in the United States.

Its other Cumbrian operations include the Carrs Billington machinery dealerships and country retail stores, and Bendalls Engineering in Carlisle.