Greencore set to hit targets in a tough market

Greencore expects to meet its main targets for its current financial year, despite the recent horsemeat scandal knocking about £6m (€7m) off its revenues to date.

The Dublin-headquartered food group yesterday reported a strong enough set of first half results — covering the six months to the end of March — given ongoing market challenges.

Group revenue of £572.9m represented a near 1% increase on the same period last year, while the core convenience foods arm marginally beat market expectations in posting a 1.8% annualised revenue increase to £542.1m.

Operating profit in that division, was up by nearly 5%, on a year-on-year basis, to £32.1m.

Group operating profit rose by 6.3%, year-on- year, to £33.7m; while adjusted earnings per share showed a near 11% annualised increase to 6.1p. Net debt increased by £14.6m, to £272.6m, but progress on its reduction is expected by year end.

According to chief executive Patrick Coveney the horsemeat scandal — traces of equine DNA were found in one of the firm’s Bolognese sauce products in February — lowered first half group revenue by about £5m-£6m, but the group’s other divisions have compensated and full-year targets should still, largely, be met.

“We’ve made good progress on our strategic agenda during the first half of the year, despite the fact that market conditions — throughout the period — proved very challenging,” he added.

Mr Coveney said the group’s ability to produce double-digit earnings per share growth, in the first half, was very pleasing and that while management expects market conditions to remain tough, it is still confident in the company’s ability to deliver adjusted earnings per share growth, for the full year, in line with expectations.

Meanwhile, Greencore’s US operations grew first half revenues by 120% — helped both by its existing subsidiaries and new supplier deals with leading chains like 7-Eleven and Starbucks.

The group is also looking to dispose of a 123-acre land asset in the south of England.


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