Greencore this morning (24 May) revealed that exceptional charges after the group’s failed takeover of Northern Foods dented its first-half profits, despite an increase in sales.
In the six months to the end of March, Greencore said that pre-tax profit plunged to EUR2.5m (US$3.5m), down from EUR10.7m last year.
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The company said that exceptional items in the period totalled EUR17.7m, of which EUR13.6m was related to its failed attempt to acquire Northern and its takeover of US takeaway food group On a Roll. Charges also included an EUR4.1m hit to settle “an outstanding claim relating to its former activities”, Greencore revealed.
The charges meant that Greencore’s operating profit – before acquisition-related amortisation – fell by more than 65% to EUR9.4m.
However, the company said that operating profit before acquisition-related amortisation – and excluding the one-off exceptional charges – rose 1.7% to EUR27m. However, on a constant-currency basis, operating profit declined 2.2%.
Sales at the sandwich maker were also boosted by currency exchange, rising 7.9% to EUR442m. Stripping out foreign exchange, sales were up a more modest 4.4%.
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By GlobalDataCommenting on the result, Greencore CEO Patrick Coveney said that the company found it “disappointing” that its proposed merger with Northern Foods fell through.
However, he added: “We learnt an enormous amount from the process and we are optimistic about our ability to drive growth and shareholder value from both our existing business and from corporate development in the months and years ahead.”
Click here for the full release and click here for coverage from Greencore’s conference call with analysts.
