Business Irish

Thursday 18 September 2014

Greencore shares surge as Uniq delivers profit boost

Published 28/11/2012 | 05:00

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Greencore CEO Patrick Coveney

SHARES in Greencore surged yesterday after the company reported higher profits than expected amid what the company said had been a "transformative year" for the business.

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Growth was boosted by the company's decision to buy the UK sandwiches and desserts maker Uniq, which contributed around 45pc of the company's turnover during the year.

For the 12 months to the end of September, profits climbed nearly 80pc to £35.6m (€44.1m) on the back of turnover, which jumped to £1.16bn (€1.44bn) from £804m (€996m).

Excluding acquisitions, the company said revenue from continuing activity was up 7.4pc on the year.

Chief executive Patrick Coveney said 2012 had been a key time for the business.

He continued: "The acquisition of Uniq has reshaped the performance, scale, capability and long-term prospects of our group, with all elements of the targeted benefits now delivered.

Strategy

"More broadly, our strategy, enlarged portfolio and team are working well as we continue to build out our convenience-food businesses in the UK and US."

Greencore has long left behind the sugar industry on which it was built and is now the biggest sandwich supplier in the UK market, as well as making a range of other ready meals.

As such, the company could be caught in what is a struggling consumer environment in the UK, while higher commodity prices are beginning to push up Greencore's input costs.

However, Mr Coveney said the firm was well positioned to deal with any challenges that may come up in that regard.

He said: "Market conditions remain challenging, with like-for-like volume pressures in the UK grocery market, little economic growth and a consumer under considerable financial pressure.

"Poor harvests in the northern hemisphere mean that we will be again confronted with input-cost inflation during full year 2013.

"Notwithstanding this, the group remains well positioned to deliver further progress in FY13 and beyond,"

Acquisitions

The board is recommending a final dividend of 2.5 pence per share, pushing up the total dividend 24pc to 4.25 pence.

The company's UK business, which has been ramped up through a number of acquisitions during the year was performing "well", Mr Coveney said.

He said there were currently no plans for further takeovers in the year ahead, adding: "That is not to say it won't happen.

"We would be prepared to move, if necessary, but we have done a lot of deals in 2012 and are focused on bedding those down now."

Greencore touched its annual high at one point before falling back to 93 pence in London, a gain of 1.8pc.

The company also confirmed that Gary Kennedy will take over as chairman from the retiring Ned Sullivan in January.

Mr Kennedy has been a non-executive director of Greencore since 2008 and chairs the audit committees at both IBRC and Elan.

Irish Independent

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