Greencore reported like-for-like sales up by 4.3%, boosted by the performance of its Convenience Foods division. Alan Williams, chief finance officer, told FoodManufacture.co.uk: “Convenience Foods performed well in a very challenging market leading to an operating profit level with financial year 2010.”
The division showed reported revenue growth of 8% and growth in operating profit of 5.3% leading to an operating margin of 6.7% compared with 6.9% in the previous financial year.
Pre-tax profits dropped to £12M from £26M last year.
Flat cakes market
Although fresh sandwiches, soup and chilled ready meals performed well, cakes and desserts suffered from “excess industry capacity and a flat cakes market,” leading to declining returns.
The Yorkshire Pudding business experienced what it described as “a challenging year” as the firm upgraded the ovens at its Leeds manufacturing site following the devastating fire in March 2010.
While the UK business experienced input cost inflation of 4%, this was mitigated by internal efficiency programmes, product reconfiguration and price rises, said the firm.
Patrick Coveney, ceo, said: “2011 has seen Greencore complete its transformation into a focused and growing convenience food business. The acquisitions that we made during the year in both the UK and the US [Massachuetts-based On a Roll Sales] should be taken as a clear indication of our long term strategy of supplementing organic growth with strategic corporate activity.”
The latest accounts include net exceptional costs of €13.6M. This reflects the costs associated with the failed merger with Northern Foods, ultimately bought by 2 Sisters owner Ranjit Singh Boparan, and the acquisition of chilled manufacturer Uniq in a £113M deal that involved raising £80M in equity.
Takeover talks
Greencore, which supplies retailers Asda and Marks & Spencer, was itself a takeover target until this week, but confirmed that takeover talks with an unnamed suitor had now ended. “Given the board’s unanimous view on the strong underlying value of Greencore and the current dislocation in global equity and debt capital markets, both parties have agreed to end discussions,” according to a company statement.
Coveney told FoodManufacture.co.uk: “We are no longer in an offer period and can get on with delivering the strategy we have set out.”
The identity of Greencore's mystery suitor was suggested to be private equity firms or Kerry.
The Ireland-based firm with listings in London and Dublin operates 16 convenience food plants in the UK and three in the US. It has a combined global workface of 7,000 people.