Greencore writes down €21 million in profits

CONVENIENCE food group, Greencore, shocked the markets yesterday when it announced a massive €21 million write-down in operating profits going back to 2006.

Up to €12m will be written off the 2006/7 accounts, while a further €9m will be deducted at the operating level from the current year’s figures, the company said.

Greencore said the results for the first two years have to be restated to reflect the losses in the accounts for the two previous years, involving €4m in 2006 and €8m last year.

The dramatic profit write downs follow a three-week investigation into the accounts of the Scottish mineral water subsidiary, Campsie, after an internal audit highlighted the discrepancies in the company’s books.

In a statement, Greencore said it was satisfied the full extent of the cover-up had been identified.

No further adjustments to the accounts are likely at this stage, although the investigations into what went wrong are continuing, said the company.

Greencore stopped short of calling the incorrect treatment of the costs at the mineral water company fraud.

It said the circumstances of the cover-up are being investigated further and it was possible criminal procedures may be taken against a number of staff, including the former financial controller.

Chief executive Patrick Coveney said Greencore had been “hit hard” by the matter. He said based on what was found to date, it did not think the former employee had sought “personal enrichment”.

The business was acquired in 2001 when Greencore bought the diversified British group, Hazelwood Foods.

Greencore said three managers who supervised the controller have now also left, and the company is going the legal route to try and recover the monies lost.

“The investigation has been thorough,” said finance director Geoff Doherty.

In its statement to the market yesterday, the board also said the €9m shortfall in operating profits in the current trading year would result in a fall of 4c on the groups adjusted earnings per share.


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