CEO Coveney spends €450k on shares in Greencore cash raise

Greencore chief executive Patrick Coveney has spent £400,000 on new shares as part of the food group's £90m raising share sale

Greencore boss Patrick Coveney has stumped up £400,000 (€450,000) of his own money as part contribution to the Irish food group’s £90m cash raise, aimed at seeing it through the Covid crisis.

Mr Coveney has acquired an extra 357,142 shares in the company via its latest share sale, with senior management, as a whole, contributing a combined £700,000 or so to the raise. The share sale saw an extra 80.3 million shares sold at a discount price of £1.12 per share.

Greencore’s largest shareholder – US investment management firm Polaris Capital Management – has spent an additional £12.9m on new shares.

The group's shares rose by over 4% on the result of the share placing, which was three times oversubscribed.

Greencore said, earlier this week, that it was looking to raise around £90m, in gross funds, in order to manage its debt and bolster its balance sheet against continued Covid challenges. The funds will allow Greencore to lower its net debt from £350m to £260m, Mr Coveney said.

The group is the largest producer of sandwiches in the UK and sells its ranges of on-the-go food products through the likes of Marks and Spencer, Waitrose, Sainsbury’s and Tesco.

Earlier this week, Greencore reported an underlying annual loss of £10.8m and a 12.5% fall in revenue to £1.26bn for the 12 months to the end of September. The business incurred Covid-related costs of £24.6m and it said the pandemic is continuing to impact its short-term performance.

However, Mr Coveney said Greencore could see a recovery in its sales volumes back to 2019 pre-Covid levels by the end of 2021. He said the channels through which Greencore typically sells its products – supermarkets, convenience stores and petrol forecourt shops – have been showing a faster recovery rate than outlets like cafes and coffee shops.

Despite its improved financial strength – the group still has around £578m in undrawn loans – Greencore will definitely not be making any acquisitions in its current financial year, which runs to the end of next September, Mr Coveney said.

However, it could hoover up additional distressed assets from other companies after having won around £75m of pre-Covid revenue contracts from failed UK food-to-go business Adelie Foods.