Greencore welcomes rising share boost

GREENCORE Group got a welcome boost from the markets yesterday when its shares rose over 4.7% or 12c despite results that showed a slight decline on 2001.

Earnings per share fell from 30.4c to 29.4c due to the massive disposal plan which has resulted in a huge chunk of profits exiting the group since its strategic purchase of Hazlewood.

In the UK, the group has cut its number of Hazlewood plants from 41 to 20.

Over the 18 months, 22 businesses have been sold and a further four were shut as Greencore bedded in the food products businesses that includes pizzas, sandwiches and a range of sauces.

The group is also the country's only sugar manufacturer and a major producer of malting barley.

Several factors underpinned yesterday's share boost.

Borrowings have been cut by €159m to €563m and further progress is expected as profits improve and group costs are curtailed further.

The group held its dividend at last year's level in order to facilitate the debt reduction further.

Turnover from continuing operations rose 23% to €1,586m while operating profits from continuing businesses rose 14% to €102.2m.

Greencore has finalised the integration of Hazlewood while disposals of €230m exceeded the target of €190m.

Disposals were completed on time and the chilled and frozen foods division is looking at strong growth, based on external demand, and its own refocusing of the group, which has the dominant or number two market position across the Hazlewood range.

Overall, the group enjoyed good growth across all four division covering chilled and frozen foods, ingredients, ambient grocery and agribusiness.

Commenting on the figures Greencore chief executive, David Dilger, who staked his reputation on the Hazlewood deal, expressed satisfaction with the figures.

"Profit from continuing operations has grown strongly. Hazlewood Foods has been fully integrated into the group and the total proceeds from the disposal programme have exceeded the announced target.

"We have made a solid start to the new financial year, a platform for continued growth into the future has been established and I confidently look forward to reporting future progress," he said.

And while the disposal programme is completed by the group, Mr Dilger said yesterday "that it is not a tablet of stone".

Mr Dilger highlighted the issues facing Rathbones a low-cost own-label producer of bread for the UK market.

Despite its high efficiency levels, loss of market to branded products is continuing to undermine the business. A joint venture would be the ideal solution to going forward.

Davy Stockbrokers, who recently became joint broker to the company with Goodbody Stockbrokers, says the group has laid the foundations for solid growth in the years ahead.

Sources say that is the reason they got involved in the first instance.

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