Wednesday 18 July 2018

Greencore chiefs in €280,000 share spree

Greencore CEO Patrick Coveney will spend about half his time in the United States to oversee remediation of its business there
Greencore CEO Patrick Coveney will spend about half his time in the United States to oversee remediation of its business there
John Mulligan

John Mulligan

Greencore CEO Patrick Coveney and a raft of non-executive directors, including former US ambassador to Ireland Kevin O'Malley, have rushed to support the embattled group after its shares slumped as much as 30pc earlier this week.

Even the wife of chief financial officer Eoin Tonge saw a buying opportunity, acquiring more than 20,000 shares in the company, the world's biggest sandwich maker.

The food group's shares tumbled after it cut its profit guidance and detailed significant issues at its US business.

All the Greencore executives who bought shares this week acquired them on March 14 - the day after its explosive news sent its stock into a tailspin.

Mr Coveney bought 68,000 shares for £1.27 each, for a total outlay of £86,360 (€97,415).

The wife of chief financial officer Eoin Tonge, Annabel Tonge, bought 20,383 shares at £1.29 each, for a total of just under £26,000 (€29,000).

Greencore non-executive director Heather Ann McSharry bought 20,000 shares at £1.27 each, while Mr O'Malley bought 10,000 shares at £1.26 each.

Fellow non-executive Greencore director Thomas Sampson paid £64,500 (€72,757) to buy 50,000 shares at almost £1.29 each. Gary Kennedy bought 30,000 for £36,000 (€40,790).

Greencore's tumultuous week was arguably the worst for its shares since 2008, when after Mr Coveney was just months into his chief executive role, the group announced that it had uncovered an accounting fraud at a subsidiary in Scotland, Campsie Springs.

That saw Greencore shares fall about 20pc.

This week, Greencore confirmed the challenges it's facing with falling sales at its legacy portfolio, while simultaneously trying to beef up sales from Peacock Foods, the Illinois-based company that generates about €1bn in annual sales. Greencore bought Peacock in 2016 for $747.5m (€606.8m).

But it confirmed this week that it's shutting a facility in Rhode Island, a plant that had supplied customers including Starbucks.

The plant was operating at about 25pc capacity.

If Greencore can't repurpose it, or sell it, it may have to take a non-cash charge of $40m relating to the plant's asset value.

"Rhode Island was running at 25pc utilisation through quarter one and quarter two of this year," Mr Coveney told analysts.

"It was quite significantly loss-making, in the order of $5m in the first half of the year. That's why we've stopped production there."

Mr Coveney, the brother of Tánaiste and Foreign Affairs Minister Simon Coveney, will now spend about half his time in the United States as the company tries to rectify its operations there.

Irish Independent

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