Group fail to ignite Greencore AGM
Uncertainties surrounding the future of the group’s bread business also left shareholders unmoved.
But it is understood that the group would sell the bread business at this stage if it could find a buyer.
An informal briefing by chairman Ned Sullivan and chief executive, David Dilger, also failed to shed much light on either situation.
Greencore doesn’t comment on rumours, said the chairman, while the chief executive said it was not appropriate to make any comment on the bread business - Rathbones.
Market sources believe that it would be sold if the group could find a buyer.
At the annual general meeting, Mr Dilger made much of the cash flow generated by Irish Sugar.
It was a phenomenon focused on across the group, resulting in a sharp downturn in group debt.
It has been cut from over €700m in 2001 to close to €400m in the year to September 31, 2003.
As the biggest sandwich maker in the world the chicken flu situation has presented no major worries and the group does not anticipate any.
Raw material prices in Britain are a concern, running at double digit increases in many instances.
At their highest for a number of years, Greencore is continuing to cut its cost base in order to counter the inflation issue.
Since it bought Hazlewood in 2001 the group set itself a new strategic course.
This brought it into the convenience food business.
This is the biggest and fastest growing market in Europe and Mr Dilger is confident the Irish group moved at the critical time.
This year alone it will spend €350m on raw materials at prices that are 5% higher on average.
On group strategy, Mr Dilger said that top line growth was no longer the issue.
Greencore’s commitment is to growing the bottom line and passing on greater returns to shareholders.
On that basis, continuing improvements in margins would assist that goal.
In 2001, group sales jumped to €1.79 billion but had declined over the past two years as Hazlewood subsidiaries were off-loaded.
The group’s near term focus is to drive up the value of the convenience food business in Britain.
Such action would continue to diminish the importance of sugar to the overall group and leave it less vulnerable to any negative ruling from the EU, which is due to look at quotas in 2006.
Strategically the group said its focus on own label goods was commercially sound. In each of its categories, the group is either number one or two in the British market.
That’s better than being a poor third or fourth in the branded sectors, said Mr Sullivan.
