Director performance bonuses axed as Greencore profit falls €4m to €77m

FOOD group Greencore has axed performance-related bonuses of close to €1.8 million for its top directors.

Its four executive directors were paid €4m in 2007, including €1.8m in bonuses, but the company’s annual report issued yesterday shows that no such payments were made last year.

This significantly slashed the remuneration package of the top executives in what is one of Europe’s leading convenience food producers, with a turnover of €1.3 billion last year.

Operating profit for the year was €77.3m, down from €81m in 2007. Profits were hit by a weak sterling-euro exchange rate in the second half of 2008.

A final dividend for the year of 8.21c per share was announced, resulting in a total dividend for the year of 13.51c per share.

Greencore shocked the markets in June last year, when it announced a €21m write-down in operating profits going back to 2006.

The write-down followed a three-week investigation into the accounts of the Scottish mineral water subsidiary Campsie after an internal audit highlighted discrepancies in its books.

Mr Dilger, who resigned as chief executive on March 31, 2008, received €1.096m last year compared with €1.44m for 2007.

Patrick Coveney, who succeeded Mr Dilger as chief executive, has seen his overall financial package drop from €909,000 in 2007 to €687,000 last year.

Mr Doherty’s total was reduced from €715,000 to €503,000 and Mr Hynes’ return dropped from €951,000 to €495,000.

Chairman Ned Sullivan stated that the excellence performance of the group’s ingredients activities significantly offset a decline in the convenience foods division.

He also noted the discovery of a deliberate concealment of costs at its mineral water business.

The group undertook a full balance sheet and financial control review, supported by KPMG. No significant additional balance sheet or systemic control issues were identified but steps have been implemented to enhance its control environment.

Mr Sullivan warned that the consumer environment in the near term is likely to remain challenging. In particular, in its core convenience foods market in Britain, the general economic outlook is poor.

However, convenience sales overall in the early part of 2009 are in line with last year. “These are undoubtedly tough times in our industry but we remain confident that the combination of our people, our low cost leadership, our well capitalised balance sheet, strong market positions and excellent facilities will ensure a positive medium term outlook for our business.”