Greencore shares plunge 6pc on firm's poor growth forecast
SHARES in Greencore plunged more than 6pc after the company said it expected little or no growth in its main market this year.
In an interim management statement covering the 13 weeks to December 28 – the first quarter of Greencore's fiscal year – the company said revenue at its main consumer foods business rose 2.5pc to £285.8m (€334m).
That figure was in line with market expectations but traders sold out of the company in spades on the back of a downbeat outlook for 2013.
"Market conditions continue to be challenging, particularly in the core UK market, which shows little or no growth," Greencore said.
"We expect this to remain the case for the foreseeable future. However, the group remains well positioned with a balanced consumer portfolio and exposure to faster-growing convenience categories," the group added.
Company chief executive Patrick Coveney told the Irish Independent the sell-off did not change fundamental strength of the business.
"The share price has had a great run of late. There was an element of profit-taking but the analysts were happy with our statement so we aren't worried about one day of selling," he said.
Greencore said it had completed the restructuring of the Uniq desserts business it bought 18 months ago, while its US business had expanded sharply. The company won a contract to supply sandwiches to Starbucks in the Boston area earlier this year.
Away from its core convenience foods business, Greencore said its ingredients and property division saw revenues fall 11.6pc to £13.1m.
The company moved its listing from Dublin to London a year ago and now reports in sterling.
That has led to speculation that Greencore may look to follow a similar model to Tullow Oil, which hosts its AGM in London and has a separate shareholder meeting in Dublin. Mr Coveney, however, said there were no plans for such a move.
At the firm's AGM yesterday, Ned Sullivan formally retired as chairman after 10 years. He was replaced by Gary Kennedy.
By the close, the stock was trading at 108.25p, down 6.07pc on the day.