Coveney looks to US for Greencore

By Brian O’Mahony

Thursday, November 26, 2009

GREENCORE boss Patrick Coveney has rejected suggestions he has overstated the performance of the group’s full-year results.

Write offs of over €25m in the year resulted in a net loss of €9.9m against profits last time of €53.4m.

In the circumstances he said the overall performance was a good showing given the overall circumstances the group had to contend with.

"I’m not shouting from the rooftops about these results, but I think the underlying performance is pretty good, but we’ve got keep doing it."

Coveney has pinned a lot of his ambition for the group on achieving strong growth in the US convenience food market.

Since it set up in that market, the group has delivered solid growth with sales of about $80m (€53m). Coveney is confident the north-east and north-west of the US will deliver sales of between $750m and $1 billion annually within five years.

Acquisitions will form part of the strategy but there is no big deal out that will deliver the ambitious figures, he said.

Joe Gill of Bloxham Stockbrokers in a note on the figures said the US could start to hit an annual sales rate of up to $220m in the near future.

Gill described the overhang of 29.9% of the group’s equity previously owned by Liam Carroll and now acquired by the banks as the "elephant in the living room".

Coveney is mindful of that. "What will be will be," he said on the shares.

"We’re giving the market enough information about our company," and he expects a smooth transition. Gill believes the shares should be sold in one block. He said: "Putting away 29.9% of any company (61m shares) is a challenge at any point but the conditions are now in place to execute it.

"We’ve argued previously that for the sake of equity holders and the company itself, the entire 29.9% should be shipped in one block. Any fractured placing will frustrate investors and managers alike, while creating a sloppy register. A clean sale gives us better ability to value the shares over a 12-month period" he said.

In such a scenario, he said, a price target of 170c was not over ambitious.

This story appeared in the printed version of the Irish Examiner Thursday, November 26, 2009