One-off costs halve Greencore profit

NET exceptional costs of £11.7 million (€13.7m) resulted in profits at Greencore being halved in the group’s latest financial year.

The food group has reported a pre-tax/post exceptional profit of £11.2m for the 12 months to the end of September; down from a profit of £26.2m for the previous year.

Operating profit totalled — again, following exceptional costs — £24.55m; as opposed to £49.55m a year earlier. However, group revenue rose by 8.7% to £804.2m, while adjusted earnings per share was up by nearly 21% to 13.9p.

Greencore’s chief executive Patrick Coveney said that management was “satisfied, if not delighted” with the underlying full-year figures, given trading conditions in its main markets and the potential for distraction from consolidation activity.

During the year, Greencore mounted a failed takeover attempt on Britain’s Northern Foods and successfully acquired British convenience food supplier, Uniq and like-minded US- based firm, On a Roll Sales.

The exceptional costs were predominantly made up of transaction costs relating to Northern and Uniq.

On a divisional basis, while Greencore’s chief markets of Britain and US remained challenging, revenues in its leading area of “food to go” rose by 9%, while “convenience foods” revenue increased by 8%.

The company also said it remained happy with its Irish-based ingredients and property division.

According to Mr Coveney: “Our underlying business continues to trade well. The acquisitions that we made during the year, in both the UK and US, should be taken as a clear indication of our long-term strategy of supplementing organic growth with strategic corporate activity.”

Mr Coveney said an improvement should be seen in profits over the coming 12 months, largely on the back of the Uniq buy improving its presence in Britain. He added that all divisions have made a good start to the current financial year, with revenue momentum maintained.

Greencore also announced earlier this week that talks relating to a possible takeover of the company had broken down. Mr Coveney said that the company doesn’t need such a deal to deliver shareholder value, but has the responsibility to examine offers should they arise.