Food company Greencore saw its full year pre-tax profit fall by 74% to £12.4m. Revenue of £2.3 billion for the Irish-domiciled but London-listed company was 56.5% year-on-year, however boosted by the acquisition of Peacock Foods in the US. The Peacock Food deal was billed as transformational for Greencore but investors have been nervous about some developments in the market and after the company lost a relatively small contract with Starbucks its shares sank 14%.
Greencore's chief executive Patrick Coveney said that reassurance for shareholders will come from today's figures and the clarity the company can now give about its business in the US. Admitting that 2017 was a difficult year in some respects for Greencore, Patrick Coveney said the company had done a lot - most notably the acquisition and successful integration of Peacock Foods - which has made the company four times larger in the US than it was a year ago. He said the US business is profitable, cash generative and growing.
Greencore is also seeing similar progress in the UK, with a lot of investment and very significant revenue growth which has resulted in a step-up in profits there. But Mr Coveney said there has been some developments specific to Greencore and market place developments which have generated questions. He said it will take the company a year or two to unequivocally address those issues and that is what Greencore plans to do in 2018, he added.
Last month the company announced a streamlining of its UK organisational and cost structure, which involves a more compact divisional structure, reduced overheads and greater functional centralisation. The Greencore CEO said that as a result of this a very small number of job losses will be made in the UK. He said the company had actually increased its workforce in the UK by 1,600 people on the back of new contract wins in the sandwich area as well as investments at its Northampton and Warrington facilities. But he said the company is streamlining management and more senior leadership roles in the UK business to help make it more productive and also to reflect the change of balance of its business there.
Mr Coveney, whose brother Simon is Minister for Foreign Affairs, said he did not think a general election before Christmas would be good for business. He said an election at this time risked weakening the Government's ability to represent Ireland's interests in relation to Brexit at what is likely to be a crucial EU summit meeting in December.
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