Sunday 25 February 2018

Investors' appetite for Greencore still on the wane

Sonia Deasy, founder of Irish luxury skincare brand Pestle & Mortar, in New York
Sonia Deasy, founder of Irish luxury skincare brand Pestle & Mortar, in New York
Samantha McCaughren

Samantha McCaughren

Greencore was the talk of the markets this week, with chatter only intensifying following a statement from the company reassuring investors there is no need to panic.

As brokers were tucking into their lunches on Friday, shares in the sandwich-maker had fallen a whopping 27pc since June, with the stock down around 16pc in the week. It took chief executive Patrick Coveney's acquisition of 50,000 shares to spark a 5pc bounce on Friday afternoon.

But people are still trying to figure out what has caused the stock to go stale in recent weeks. Although there has not been an iota of bad news to cause the tumble, 20 million shares changed hands last Thursday, one of the company's biggest-ever trading days.

Of the 11 analysts listed as covering the stock on Bloomberg, all have a buy rating for the food group and a target price of over £3.

The shares are now trading at just under £2. With a stunning 50pc upside there to be had (it would seem), why has the share price been on the slide? Market sources tell me that some short sellers have been on the scene for the past few months. But this doesn't seem to be the sole cause of the stock's fall.

Are there other reasons why investors have lost their appetite for Greencore? For one, some in the market believe that the UK will prove tricky in the medium term. Greencore is a huge player there but dependent on the supermarket chains, which squeeze suppliers like no other retailers, and leave no upside.

And consumer confidence may worsen there in the coming months and years, putting pressure on margins. Also, the impact of changed migration policies in the UK could leave Greencore's processes - which depend heavily on hard-working, low-paid Eastern Europeans - under immense pressure.

And, despite Coveney's convincing rationale for expanding massively in the US, some investors here remain cautious about the Irish food company's ability to thrive in that market. With Aryzta's US woes an all-too recent memory for food stock enthusiasts, those fears will hopefully prove to be unfounded. After putting some money where his mouth is, the ever-smooth Coveney will no doubt do his best to soothe worries at full-year results in a month's time.

Irish beauty brand Pestle & Mortar could be big in Asia

Irish luxury skincare brand Pestle & Mortar will soon be available to London’s most affluent women — the city’s most exclusive department store, Harvey Nichols, has agreed to stock the range.

Company founder Sonia Deasy, who was born in Ireland to Indian parents, said the deal came about through its new commercial manager Mark O’Sullivan, who spent several years working in the UK. “We sent them in samples and they loved them,” she told me.

There will be a launch of the product in Harvey Nicks next month with a ‘meet the founder’ event.

Sonia, who runs the company with photographer husband Padraic Deasy, set up the company in 2014. They have just closed their photography studio in Kildare to dedicate their time to the beauty business. Little wonder — they are close to finalising a deal with Luxasia which will see the company distributed across the continent.

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Irish drinks giant C&C Group, which has been struggling with lacklustre cider sales, is really tapping into Celtic fans in the UK with a new sponsorship push.

The company, which owns Magners and Bulmers, has signed a new partnership with online drinks retailer Flavourly to distribute special edition Lisbon Lions commemorative packs.

For those not in the know, Lisbon Lions is the nickname given to the Celtic team that won the European Cup in Portugal in May 1967. C&C Group, which sponsors Celtic Football Club, initially launched commemorative packs of Magners Cider in March to mark the 50th anniversary of the European Cup win. According to reports, the limited edition sold out within a fortnight of the launch and a second run, released in June, also sold out.

C&C said the agreement with JW Filshill, owner of Flavourly, means it can now meet demand for packs from Celtic fans across the UK via the Flavourly home delivery service. C&C can only dream that demand for its core products would ever come close to such heady levels.

Kavanagh eyes up luxury property in Co Wicklow

Developer Greg Kavanagh may be in the market for a new gaff.

The former boss of New Generation Homes was spotted viewing Luggala, the famous ancestral family home of the Guinness family. Located in the Wicklow mountains, it has been on the market since February with a price tag of €28m.

The new owner will need very deep pockets indeed — the 22-bedroom property, which is set on 5,000 acres near Roundwood, will require significant upkeep.

Several well-known business people have been linked to the property but, alas, I hear that Kavanagh is not too keen.

Last October, Kavanagh left New Generation after an agreement with the company’s financial backers M&G and New Generation’s current ceo Pat Crean.

Kavanagh has been quiet since then and although he has been linked with other projects in his native county Wicklow, he has yet to publicly settle on a new development.

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It’s just over 18 months since businessman Denis O’Brien sold his chain of petrol stations, Topaz, to Canadian company Couche-Tard and there has been quite a change in the management line up since then.

Former ceo Emmet O’Neill, nephew to O’Brien and now an investor in O’Brien’s Quinta de Lago resort, is long gone. But I hear that Liam Mulcahy, one of the last remaining members of the senior management team that created and led Topaz, has stepped down from the business.

Mulcahy is a veteran of the oil industry in Ireland — he worked in BP and in Statoil and was a key part of the management team which led the acquisition of Statoil, the merger with Shell and the creation of Topaz. He was commercial director at Topaz with responsibility for managing key relationships including commercial fuels and home heating.

I understand that Mulcahy is on “gardening leave” from the company while he explores a number of opportunities.

Sunday Indo Business

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