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July 28, 2020

Greencore enters deal for molasses unit, issues Q3 trading update

Greencore has announced this morning (28 July) it plans to sell its molasses business, and also issued a trading update.

By Dean Best

Greencore, the Ireland-based convenience foods manufacturer, plans to sell its molasses businesses to United Molasses Marketing.

London-listed Greencore, one of the largest private-label suppliers in the UK, said this morning (28 July) it has signed a conditional agreement with United Molasses Marketing and its Ireland-based division for the former to acquire the business for a cash consideration of GBP15.6m (US$20.1m).

Its molasses unit is involved in the import and distribution of animal feed across the island of Ireland, the company said in a statement.

Greencore added it will use the proceeds from the sale, which is subject to the approval of the relevant anti-trust authorities, to strengthen its balance sheet.

The company also issued a trading update this morning for the third quarter running to 26 June, and said annual guidance – withdrawn in March – remains suspended due to the uncertainties from the pandemic.

Greencore said revenue fell 34.1% in the quarter to GBP240.6m, with the food-to-go segment down 50.6%, while its other convenience food categories were up 2.2%.

Over the nine-months, reported revenue dropped 10.6% to GBP953.3m and food-to-go declined 16.9%. Other categories rose 1.4%.

On a pro-forma basis, Greencore said its third-quarter revenue dropped 36% but was “23% below prior year levels in July to date”

The group pointed to “encouraging sequential improvement of demand in food-to-go categories through Q3 and into Q4”.

Over the first nine months of Greencore’s financial year, reported revenue dropped 10.6% to GBP953.3m and food-to-go declined 16.9%. Other categories rose 1.4%.  

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