Greencore: Sales in core area fall 7.5%

GREENCORE, the world’s largest maker of sandwiches, says sales at its core convenience foods division fell 7.5% to €248 million in the four months to July 31.

Sterling’s weakness hurt the value of British sales in euro terms, but the group said it expects to deliver full year earnings per share within the 22.8 to 25 cent range expected by markets.

Bloxham Stockbrokers said the weaker tone to the statement suggests consensus forecasts for the year will drift towards the lower end of analysts’ forecasts.

The group suffered a 17% currency loss in the transfer of sales from sterling to euro, which saw turnover fall 7.5% to €284m over the first four months of the second half of this trading year, which ends on September 30. On a like-for-like basis food sales were 7.2% ahead in the period, reflecting a 3% increase in volume and 4.2% on price.

“The underlying sales performance of our convenience food division remained solid in the four months ended 31 July against the backdrop of a notable deterioration in consumer sentiment in the UK since June.

“We continue to confront the impact of input price inflation, as outlined in our half year results, and have made good progress in restoring margins at our ambient cooking sauces and pickles business”, it said.

In the US Greencore has had an “encouraging start” there since it acquired Home Made Brand Foods Inc in April. Since then Greencore has signed a ten year US chilled foods exclusive deal with WeightWatchers International.

It was finalised last month and will see Greencore develop a range of chilled foods in the US under the WeightWatchers brand.

Initial products are scheduled for trial and introduction at selected US retailers in early 2009 is the target launch date, it said. The new contract builds on the existing relationship Greencore has with WeightWatchers in Britain.

Elsewhere the group said its ingredients and property businesses were trading well

In June Carlow County Council rezoned 220 acres of the group’s lands in Carlow for mixed use redevelopment, bringing development of the site closer.

Commenting on the €21m fraud at its Campsie Mineral Water business in Scotland the group said an internal review being carried out by consultants, KPMG, confirmed that the financial impact was as initially reported by the group.

Shares in the group were down 20 cents to €2.10 by late afternoon, a fall of 8.75. on the day.