Tuesday 23 October 2018

Greencore shares take hit despite US boost

Greencore’s Patrick Coveney
Greencore’s Patrick Coveney
John Mulligan

John Mulligan

Irish food group Greencore, the world's biggest sandwich maker, has yet to convince shareholders that it's back on track after its shares slumped as much as 4.5pc yesterday - despite signs that its US operation is performing well.

Greencore, headed by CEO Patrick Coveney, stunned shareholders back in March with a profit warning that slashed the group's value by a third.

And while the share price had recovered substantially since then, yesterday's declines show that it still has work to do to sell its recovery prospects to investors.

Greencore said that its revenue rose 0.5pc to £639.6m (€716.9m) in the third quarter on a reported basis, and 8.1pc on a pro-forma basis.

In the year to date, its revenue rose 14pc to £1.87bn (€2.1bn), which was 8pc higher on a pro-forma basis.

The company said that in the United States its convenience foods unit reported third-quarter revenue of £263.7m (€295.6m), which was 0.8pc lower year-on-year, but 8.6pc higher on a pro-forma basis.

In the year to date, the unit's revenue has risen 7.5pc on a pro-forma basis to £767.2m (€860m).

"The strong pro-forma revenue growth in the quarter [in the US convenience foods division] was driven by the former Peacock Foods business where pro-forma growth accelerated to 19.4pc, with a broadly similar level of volume growth," according to Greencore.

It added: "The volume growth reflects good underlying category growth and the impact of new business."

In the UK and Ireland, revenue rose 1.4pc to £375.9m (€421.4m) on a reported basis, and by 7.8pc on a pro-forma basis.

In the year to date, the division's revenue rose 5.2pc to £1.1bn (€1.23bn) on a recorded basis, and by 8.4pc on a pro-forma basis.

Third-quarter growth in the unit was driven by the food-to-go business.

Greencore said that former General Mills executive Anton Vincent joined as CEO of Greencore USA last month.

Peter Haden, the company's group chief operating officer, has been appointed to the newly-created role of CEO of Greencore UK.

Greencore said it anticipates good pro-forma revenue growth in the fourth quarter.

Irish Independent

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