Food group Greencore has reported operating profits of €42m for the six months to the end of March, in line with the same period a year earlier, though exceptional charges meant it recorded a pre-tax loss of just under €11.3m. The company took a hit of €44m as it ended its sugar processing business. Adjusted earnings per share rose by 2.2% to 13.7 cent.
In March, Greencore announced its decision to exit the sugar processing business and it says this will result in a fall of about €10m in profits for 2006.
The company said that the gross costs of getting out of the sugar business would amount to €168m, partially offset by Greencore's legal entitlement to €131m of EU restructuring aid. It said it has resulted in an exceptional charge to the first half results of €44m.
Greencore said its decision to leave the sugar industry means that it is now completing its transition from a predominantly agri-business entity into a convenience foods company. This division delivered a 'solid' performance, with turnover up 8.1% to €442m and operating profits up 2.2% to €30.3m.
The company said this profit growth was achieved against a very strong comparative period, a time in which profits were enhanced by a short term contract to supply a competitor after a fire at one of their facilities.
'These results represent a solid underlying performance against a background of a competitive convenience foods environment and EU sugar reform that has led us to exit sugar processing in Ireland', commented Greencore's Group CEO David Dilger. 'The future for Greencore now lies in Convenience Foods. I am pleased by the continued progress of and future prospects for that division,' he added.
'We have high performing businesses right across the range of our operations - with nine of the ten Convenience Foods businesses growing at or above market growth rates. Against this background, we are confident that we will deliver a good performance for the full year,' he concluded.
Greencore shares closed up 20 cent at €4 in Dublin.
