Business Irish

Thursday 19 September 2019

Greencore's revenues jump but profits slump after challenging year for Dublin-based food giant

Patrick Coveney, CEO of Greencore
Patrick Coveney, CEO of Greencore
Louise Kelly

Louise Kelly

Greencore has said it expects to deliver a year of strong growth in 2018, stating that the Dublin-based firm is well positioned to drive cash flow and returns over the medium term.

According to the full year results from the London-listed convenience food producer, its group revenue for the year jumped to £2.319bn - a rise of 56.5pc - with adjusted operating profits rising 37.4pc to £140.1m.

However, pre-tax profits fell some 74pc to £12.4m as a result of exceptional items which include the restructuring costs and expenses related to Greencore's acquisition of Illinois-headquartered Peacock Foods.

This deal was the group's largest ever acquisition and was partly funded through a rights issue.

Greencore has endured a tough 12 months as concerns about the strength of its US business has weighed on the share price.

Read more: Greencore shares slump after listeria find prompts recall

CEO Patrick Coveney said that the company has been "substantially transformed" over the last 12 months, and that toil sets Greencore up "very well for further progress".

"The acquisition of Peacock Foods and the significant UK network investments made to support large new business wins have reshaped our business. Group pro forma revenue growth was strong at 9.4pc - driven in large part by 18.8pc growth in UK Food to Go," he said.

"We are pleased with the progress of the US integration to-date and with the development of our US commercial pipeline, as illustrated by a recently extended long term, strategic partnership with one of our largest and most important customers."

Mr Coveney acknowledged the challenges that related to the firm's transformation but remained positive in his future outlook.

"We are confident that our strategy, portfolio, business model and momentum positions Greencore well to drive profitability, cash flows and returns in FY18 and beyond," he said.

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