Whither now for Greencore?
SO where does Greencore go from here? With the disposal of its malting business to French company Axereal for €116m, the former Irish Sugar Company has now shed virtually all of its legacy businesses.
The disposal came on the same day that Greencore released its interim management statement. This revealed that the group enjoyed very strong trading for the three months to the end of December, with sales up by 6.5 per cent on a constant currency basis.
Following the disposal of the malting business, the only remnants of Greencore's legacy activities are the sites of the former Irish Sugar factories in Mallow and Carlow, and a site in the south of England.
The malting disposal also reduces Greencore's debts to very manageable levels, from approximately €283m at the end of September 2009 to just €190m. This reduces the pressure on Greencore to dispose of its property assets for firesale prices.
With Greencore now having been stripped down to its convenience foods division, the challenge facing chief executive Patrick Coveney will be to extract higher margins from his UK supermarket customers.