Greencore: More US acquisitions not being ruled out

Greencore hasn’t ruled out the prospect of making more acquisitions in the US as part of its ongoing growth and investment strategy.

The convenience food group’s US operations mainly sees it provide sandwiches and other food products to the Starbucks and 7-Eleven chains. It saw revenues increase 25% in the year to the end of last September, to around €240m, and make up about 15% of group sales.

Via previous acquisitions and greenfield site constructions, Greencore now operates seven manufacturing facilities in the US, servicing 25 states. Its Jacksonville, Florida, a facility will generate revenues of around $100m (€88m) this year and when new sites in Rhode Island and Seattle are fully operating, Greencore’s US interests will have the capacity to generate annual revenues of around $700m.

Speaking at the group’s AGM in Dublin, yesterday, chief executive Patrick Coveney said the company is now becoming “a material, national and large-scale business in the US” with a presence across the country.

He added that a large degree of forward-looking investment is planned. While that will largely relate to work on existing facilities,

Mr Coveney said that more acquisitions could be undertaken if they were in line with strategy, while additional manufacturing sites could also be commissioned. “We’d like to continue to grow our US business,” he said, while also noting that much of the progress will come through natural like-for-like business growth.

According to Greencore’s latest trading update covering the first quarter of its financial year (the three months to the end of December) and published ahead of yesterday’s shareholders’ meeting — revenue from the group’s US operations rose by 34.1% on a reported basis and by 19.5% when measured on a like-for-like level.

“This was driven, principally, by the continued roll-out of new products with a key customer. The construction of the new facility in Rhode Island is nearing completion, with commissioning due to commence as planned in the second quarter,” the company said in its statement.

When asked at yesterday’s meeting about the prospects for adding further big name customers to its roster in the US, Mr Coveney said that the group’s existing partners, Starbucks and 7-Eleven, will remain its primary channels, adding the company “doesn’t need new customers to grow the business [in the US]”.

Additionally, Mr Coveney said the group has no plans to expand its geographical spread any further in terms of manufacturing bases saying Britain and the US will remain its prominent markets. The products it sells in Ireland and mainland Europe are made at one of its UK facilities.