‘Breakthrough year’ for Greencore

Greencore has beaten market expectations with a strong set of annual results, covering what management has called a breakthrough year for the group.

The convenience food producer yesterday reported a £17m (€21m) increase in pre-tax profits to just under £29m (€36m), for the 12 months to the end of September.

Group operating profits — before exceptional items and acquisition costs — amounted to £70.7m, up by 37.3% on the previous year. After exceptionals, operating profit for the year amounted to £46.5m; up from £24.5m a year earlier.

Revenue was up 44.5% to £1.16bn with adjusted earnings per share going from 10.5p to 12.8p. Management has recommended a final dividend for shareholders of 2.5p per share; which would amount to a total dividend for the year of 4.25p, up 24.6% on the previous year.

The better-than-expected figures were mainly driven by the positive effects of the group’s €128.5m takeover of rival British player, Uniq, last year — a deal which has significantly increased its scale and presence in the UK market.

However, while the Uniq business grew revenue by 6.7% in the year, Greencore’s existing convenience business saw a 7.7% rise.

Greencore’s convenience food division grew revenue by 49%, to just over £1bn, and operating profits by 40%.

The group’s remaining Irish-based ingredients business saw a 3% rise in revenue but a 23% fall in profits. However, the group’s main focus is now on being an international private label consumer foods business — operating in the US and Britain.

Greencore’s CEO Patrick Coveney called 2012 — which saw the group grow its convenience food operations in its core markets, as well as de-listing from the Iseq — “a breakthrough year” for the group.

“The acquisition of Uniq has reshaped the performance, scale, capability, and long-term prospects of our group, with all elements of the targeted benefits now delivered.”

He said that while management will remain on the look out for further opportunities, Greencore is likely to be less active, in terms of acquisitions in its current year, with organic growth and debt reduction two main focuses of 2013. Net debt rose to £258m in the past year.