Food group Greencore has reported pre-tax profits before exceptional items and goodwill of €32.6m for the six months to March 25, an increase of 8% on the same period a year earlier.
Sales were up 2% to €677.3m after sales from discontinued businesses were stripped out, and the company warned that market conditions were 'challenging'.
The company's convenience food division performed strongly, with underlying sales up 8% and underlying profits up 23%. Greencore said the division was operating in an increasingly competitive market, with pressure on prices and higher quality requirements from customers.
Sales in the ingredients and agribusiness division fell by 8% in the first half, with profits down from €20m to €15.3m. Greencore said the fall in sales was due to lower sugar sales and the closure of some operations in its malt division. The company said there was an EU-wide oversupply of sugar this year, leading to increased price competition. Higher fuel costs added an extra €2m to costs in this division in the period.
The group is facing reform of the EU sugar regime, with the Commission having made proposals for quota and price reductions last year and a final decision expected by the end of the year.
Greencore took an exceptional charge of €65.4m to cover the costs of closing its Carlow sugar manufacturing facility. When exceptional items and goodwill are included, there was a pre-tax loss of €49.3m.
Headline earnings per share increased by 6% to 14.2 cent, while an unchanged interim dividend of 5.05 cent is to be paid.
Greencore shares closed two cent higher at €3.26 in Dublin this evening.
