Greencore's tax bill just €566,000 thanks to 2011 Uniq buy
Irish food group Greencore - the world's biggest maker of sandwiches - is still paying an effective tax rate of just 1pc following its £113m acquisition of British firm Uniq in 2011. Its tax bill in the last financial year was just £400,000 (€566,000).
Greencore - spawned from State-owned Irish Sugar in the early 1990s - has been using £400m (€566m) of unused tax losses and capital allowances that were on Uniq's books when it was bought, in order to slash the Irish firm's tax bill. Greencore also had an effective tax rate of 1pc in the previous financial year.
Speaking to the Irish Independent, Greencore chief executive Patrick Coveney said that about half that £400m has already been used to offset tax liabilities. While it's headquartered in Ireland, Greencore is listed on the stock exchange in London and currently generates the bulk of its annual £1.34bn (€1.9bn) revenue in the UK. Most of the deferred tax assets relate to Uniq, although some are as a result of start-up losses incurred in the United States.
Greencore had a £7.3m (€10.3m) tax corporation tax liability in Ireland at the end of its financial year in September. Utilising the deferred tax assets, coupled with other accounting items, meant its final tax bill was just £400,000. It made a pre-tax profit of £62.8m (€88.8m) in the period. It paid pre-exceptional tax of £500,000 the previous year.
"When we acquired Uniq four years ago, it came with about £400m of unused tax losses and capital allowances," said Mr Coveney. "We're probably about half our way through that at the moment. The faster we use it, the more profitable it means our business has been." He added that the tax losses accumulated by Uniq have undoubtedly been "very beneficial" for Greencore. He expects that Greencore will work through the deferred tax assets "over the next few years".
Greencore revealed strong full-year results yesterday, with revenue on a life-for-like basis rising 5.4pc and operating profit up 10.6pc to £91.7m.
It is performing significantly ahead of its peers in a challenging UK market. It has also been expanding in the United States, where customers include Starbucks.