Greencore hoping to reinstate shareholder dividend next year 

Greencore CEO Patrick Coveney hopes the convenience food group can restart dividend payments next year despite ongoing trading uncertainty due to the Covid crisis.

Convenience food group Greencore is hopeful of restarting shareholder dividends next year after having suspended payments 12 months ago due to the impact of the Covid crisis.

Chief executive Patrick Coveney confirmed there will be no dividend paid during Greencore’s current financial year, which runs to the end of September. However, he said he is hopeful dividends will resume during 2022.

He said it would depend on how the business evolves and “how quickly our economic model comes back after Covid”.

Greencore is yet to restore any near-term revenue or profit guidance due to continued trading uncertainty because of Covid.

Falling revenues

Mr Coveney was speaking as Greencore held its agm and reported a 15% year-on-year drop in group revenues for the first quarter of its current financial year.

Revenues dropped to £312.7m (€352m) in the three months to the end of December, from the same period a year earlier. For its core food-to-go division, Greencore reported a 22% year-on-year revenue fall to £188.5m.

Greencore’s shares – down nearly 55% in the last 12 months – fell by nearly 3% on the update.

The Irish group is the largest producer of pre-packed 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.

Latest lockdown

Mr Coveney said the latest lockdowns in the UK and Ireland have had a lesser impact on sales than the first wave of Covid restrictions last spring.

He said Greencore and its selling customers remain convinced that the food-to-go channel – largely comprised of office workers picking up pre-prepared sandwiches, salads and wraps at lunch or en route to work – will continue to thrive after the crisis.

Nevertheless, Mr Coveney said difficult trading conditions are likely to persist in the near term.

However, having hoovered up around £90m worth of revenue contracts from failed UK food-to-go business Adelie, Greencore said it secured a number of new business wins in the first quarter and has “a healthy commercial pipeline”.

Mr Coveney also said the group has seen only a limited supply chain impact from Brexit thus far, with the UK-EU trade deal having seen a worst case scenario avoided.