Greencore records rise in revenue of 8.7%

GREENCORE REPORTED full-year results in line with expectations yesterday, with revenues rising by 8.7 per cent to £804.2 million (€939 million), a 4.3 per cent rise on a like-for-like basis. Earnings per share were 13.9 pence compared to 11.5 pence in 2010.

The accounts for the year ended September 30th, 2011, were presented in sterling for the first time, though the group income statement did not include the recently acquired UK business, Uniq.

Operating profit from continuing operations was £51.5 million, broadly in line with the previous year. While the operating profit performance slightly disappointed some analysts, operating profit in the company’s core convenience foods division rose by more than 5 per cent. Operating profit at the company’s ingredients and property business, which represents less than 10 per cent of overall group revenue, was down by more than half.

Overall, Greencore’s convenience food division, which includes the company’s operations in Britain and the US, enjoyed revenue growth of 8 per cent, or 3.4 per cent when revenues from its recently acquired US business On A Roll are excluded.

Its “food to go” division, which includes sandwiches, sandwich-type items such as baguettes, salads and sushi, performed strongly. The prepared meals business, which includes ready meals and quiches, experienced double-digit growth, though the quiche market struggled, falling by 2.7 per cent in value terms.

Its grocery business, which involves the production of longer shelf-life products such as sauces and pickles, returned to growth.

Together, Greencore’s food to go, prepared meals and grocery divisions represent more than two-third of revenues.

Greencore incurred an exceptional charge of £11.7 million during the year. This comprised a £19.4 million charge related to the proposed merger with Northern Foods, the acquisition of Uniq and other costs, offset by a once-off tax-related credit of £11.7 million.

Adjusted earnings per share were 13.9 pence, up 20.9 per cent.

The net pension deficit increased to £130 million, up from £100 million in 2010.

Speaking to The Irish Times yesterday, chief executive Patrick Coveney said the integration of the Uniq business, now in its ninth week, was progressing well. “We said at the announcement of the deal that we expected to make synergies of £10 million, £7 million of which would be achieved in 2012. We’re on track to do that.”

A number of roles and responsibilities had transferred to the Dublin head office, he said, with executives travelling between Ireland and the sites in the UK. Greencore is expected to move its primary listing to London by spring.

Commenting on Monday’s announcement that talks with a prospective buyer had ended, Mr Coveney said Greencore was obliged to examine any approach on behalf of its shareholders.

He added that Greencore would continue to look at propositions “on merit” if opportunities present themselves.