Greencore cools its Brexit optimism

Greencore cools its Brexit optimism
Patrick Coveney

Greencore boss Patrick Coveney has admitted the sandwiches and wraps-maker has grown less optimistic about the chances of a smooth and orderly Brexit and is putting greater emphasis than before on planning for a hard or no-deal outcome.

Speaking at the company's AGM in Dublin, Mr Coveney said he remains confident Britain won't crash out of the EU without a trade deal in place.

However, Greencore is looking at alternative ways to import food ingredients into its main UK operations without shipping from Calais to Dover, if the country's existing supply chain mechanisms break down.

Air freight is one option under consideration, while shipping into smaller UK ports is another option. The company will need to have a plan in place within the next three weeks.

As it stands, Greencore has enough product warehoused to deal with one to three months of disruption to the main shipping channels in a no-deal scenario. But if there is no deal, it will have to tweak certain product ranges and replace certain ingredients and the price of its products may rise.

"We're not immune, but we should be able to construct a solution that there will be a decent availability of some food but there will be impact," Mr Coveney said.

"There are more products air-lifted into the UK than one might think. The challenge is to find a way to get product quickly from where it's grown into the UK," he said.

While he said short-term uncertainty around the UK is understandable, Mr Coveney said Britain remains an attractive long-term market.

"In the longer term there's a lot to be positive about. It's a large, wealthy market that pays a lot for its food. The own label area [in which Greencore trades] is a very lucrative busines in the UK. We're well set up," he said.

Greencore's latest trading update - for the three months to the end of December - shows it made a good start to its latest financial year, with headline revenue - which excludes disposed assets, including its US business - rising by 5.8%.

Greencore's shares rose by almost 4% before paring back part of that gain. Mr Coveney said he expects Greencore to grow further in the UK through acquisition, although it is in no hurry to execute deals.

He said deals would be looked at in the context of shaping the group for the next 5-10 years.

Chairman Gary Kennedy earlier told the meeting the company "won't be afraid to act" if it found something that would accelerate its growth and that there are "all sorts of organic and inorganic" opportunities through which to grow.

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