Greencore pre-tax profits up 9%

GREENCORE Group has reported pre-tax profits up by 9% to €31.4 million for the six months to March.

The group has a strong focus in Britain, where it is a supplier of chilled, frozen and ambient sauces to the major supermarkets with the exception of Marks & Spencer.

Roughly 70% of turnover has been generated in Britain since the takeover of Hazlewood two years ago Greencore operates across three divisions at this stage, including chilled and frozen foods, ambient grocery and ingredients, and agribusiness.

Its business includes Irish Sugar on which the group was founded.

Today sugar accounts just for 20% of profits and that will continue to decline as the group increases its focus on the convenience and chilled food businesses in Britain.

All divisions reported an improved performance over the first six months of the year in terms of sales and margins.

Operating profits increased by 7% to €48.9m and would have been up 12% were it not for the loss in the currency translation from sterling to the euro.

Earnings per share worked out at 14.1c, an increase of 2% Critically for the group, it cut its net debt by 66m to €497m.

Though it continues to struggle somewhat with its bread and pizza operations, the outlook for the group remains positive.

The shares rose 10c in early trading following publication of the figures.

Chief executive David Dilger said: “These are very strong results both in terms of profitability and cashflow, and are a product of the extensive restructuring the group has successfully undertaken over the last two years.”

“The group remains on course to deliver full-year earnings per share in line with consensus analysts forecasts.” Greencore is attempting to redefine itself as a quality player in the rapidly expanding convenience food and sandwich market in Britain, where the potential is regarded as huge.

It is the biggest sandwich maker in the world, producing four million a week. It also sells hundreds of thousands of ready meals and quiches daily The group is focussing on the delivery of further growth in these two key areas.

Mr Dilger believes that if the group continues to produce results out of Britain, the re-rating of the group will follow on the back of a steadily improving trading performance.

He denied also that Irish Sugar was for sale, but hinted a new relationship between Greencore and the sugar company may emerge in time.

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