Patrick Coveney-led food group Greencore cuts salaries and scraps dividend plan

Irish sandwiches and wraps maker Greencore has scrapped dividend plans and its existing earnings and revenue forecasts, in light of the Covid-19-driven disruption.

The announcement of the move dragged the UK-focused convenience food producer’s shares down by as much as nearly 8%. The stock pared some of those losses, but closed down nearly 6%.

At the time of its full-year results, in November, Greencore said its medium term goal was for mid-single-digit organic revenue growth and high single digit adjusted earnings per share growth.

In January, the group said it was anticipating a year of profitable growth. Greencore is due to publish first-half financial results – for the six months to the end of March – in May.

It has now said, however, that it has suspended financial guidance for this year and that it’s previously published outlooks “should no longer be considered current”.

The group – which is the largest maker of pre-packed sandwiches in the UK market – said consumer demand has changed rapidly since Britain escalated its measures to combat the spread of the virus.

Greencore said it is taking “prudent measures” to protect profitability and cashflow.

It said it will continue to focus on balance sheet strength and liquidity, with a “substantial” portion of spending plans being shelved and interim dividend plans scrapped.

Greencore’’s executive directors will also take a 30% pay cut for three months.