Proof will be in the pudding for Greencore

Headquartered in Dublin, listed on the London Stock Exchange, with three-quarters of its investors based in the United States, and the world’s biggest sandwich maker — Irish convenience food group Greencore is a mix of ingredients, much like the 10 million-plus sandwiches it prepares every week for the British market.

It’s a long way from its roots, out of the privatised Irish Sugar operation from the early 1990s. Led by Irish man Dalton Philips, Greencore sold its last trading Irish asset two months ago with the €9.8 million sale of edible oils business Trilby Trading Ltd.

Greencore is also in the process of selling landbanks at its former sugar factories in Mallow, Co Cork and near Carlow town. Before the 2008 crash, when property speculation was rife, Greencore had hopes of making a killing from the lands having exited sugar production and closed the factories.

A €1.1 billion plan to build 3,000 houses and a business park in a project called Carlow Gateway was unveiled in 2007 but it was scrapped after the financial crash. The sale of an 80-acre site there is now expected to net a more modest €10 million.

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Having largely flagged them to the market on October 10th, Greencore’s full-year results this week included few surprises. Revenues and profits were up against a tough inflationary environment with a focus on reducing costs. Roughly one in six management roles have been axed.

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Greencore has had a tough three years, between Covid, hyperinflation (costs of €230 million were booked in the year to the end of September), and a cyberattack in late 2021 that left it with net costs of £1.9 million and forced it to invest in new systems.

Its sandwich business is growing versus a market in decline overall and the food-to-go business has been boosted by the ever-increasing numbers of people returning to the office in London.

But volumes are still tight, inflation remains a challenge and the national living wage increase will push up labour costs.

As noted by Davy stockbrokers, management provided a “positive tone” on current trading, noting a “pleasing start” to the year, with a focus on improving profitability and delivering for the full year 2024 within the range of current market expectations. The proof will be in the pudding — frozen Yorkshire puddings in Greencore’s case.