Greencore shares jump but ‘too early’ to call on longer term impact

Shares in Irish consumer food group Greencore jumped by as much as nearly 7% after it said it has not suffered any disruption to its supply chain or production network.

Shares in Irish consumer food group Greencore jumped by as much as nearly 7% after it said it has not suffered any disruption to its supply chain or production network.

However, the UK-focused company said it remains too early to predict the impact of Covid-19 on its financial performance this year. Greencore is the largest maker of pre-packed sandwiches in Britain.

“We are closely monitoring all aspects of our business and are confident that we have the team, customer partnerships and protocols in place to maintain food supply through this uncertain period,” said Greencore’s chief executive Patrick Coveney.

Greencore is due to report financial results for the first half of its financial year — the six months to the end of March — in mid-May. It said trading for the year to date has been “broadly in line with original expectations”.

“From a demand perspective group volumes are holding up well, albeit there is a pronounced change in mix across different parts of the product portfolio and across customers’ store formats,” the group said.

Greencore said its cash generation has proceeded in line with plan and the group retains “substantial” financial headroom, “with significant access to cash and undrawn committed debt facilities” and with no debt due for repayment inside the next 18 months.

“In the context of the rapidly changing Covid-19 situation, we believe governments will ensure that essential supply chains continue to function,” said Davy analyst Roland French.

“This includes food retailers and their upstream manufacturing partners, such as Greencore. Liquidity and an operational production network will be critical pre-requisites in navigating the current crisis — the duration of which is unknown.

We believe that Greencore has sufficient liquidity to withstand any demand shock over the coming months,” he said.

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