Greencore, the Irish food group, has seen the fall in the pound against the euro eat into half-year profits.
The company today (28 May) posted a 2.5% rise in underlying operating profit to EUR41.1m (US$64.5m) for the six months to 28 March. Stripping out the effect of currency fluctuation, profits were up 11.8%.
The weaker pound also hit sales, with turnover up 2.5% to EUR648.7m. On a constant-currency basis, sales climbed 10.4%.
Chief executive Patrick Coveney said: “These results represent very good progress in an environment characterised by substantial food inflation and a significant decline in the value of sterling relative to the euro.
“This performance reflects a portfolio that is working, strong customer relationships across convenience foods and malt, excellent cost control and good inflation recovery.”
The rise in profits came from Greencore’s ingredients business, which saw earnings soar by 72%.
Profits from the company’s convenience foods business, which accounts for more than two-thirds of earnings, fell 3.8%, due to rising commodity costs. Greencore said it saw “margin attrition” in its ambient cooking sauces and pickles business.
However, Greencore said it expects “modest profit growth” from its convenience food business on a constant-currency basis as it looks to increase prices.