Irish food group Greencore today (6 December) reported a drop in annual profits as costs linked to its aborted merger with Northern Foods hit the company’s bottom line.
Greencore booked net profit from continuing operations of GBP19.9m (US$31.1m) for the year to 30 September, a fall of 7.8%.
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The company’s annual net profit included GBP11.7m in costs linked in part to charges from its failed attempt to merge with UK rival Northern. Greencore saw its plans derailed by UK poultry supplier Boparan Holdings, which acquired Northern in April.
The costs also included restructuring charges and a legal settlement, Greencore noted.
However, Greencore’s underlying profits fared better and the results boosted its stock, a day after its shares tumbled following its admission that talks to sell the business had failed.
Greencore’s shares fell 11% yesterday after it said takeover talks with a mystery suitor had ended. Today, Greencore’s shares were up 3.61% at EUR0.66 on the Irish Stock Exchange.
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By GlobalDataExcluding the costs, Greencore’s net profit jumped 47.6% to GBP31.5m. However, the company’s operating profit dipped from GBP51.6m to GBP51.5m as its cost of sales increased. Operating margin from its core convenience foods dropped 20 basis points to 6.7%.
Revenue was up 8.7% to GBP804.2m. Like-for-like sales, which excluded an extra selling week in the year and the impact of Greencore’s acquisition of US firm On The Roll, increased 4.3%.
CEO Patrick Coveney said the year had seen the “transformation” of Greencore into a “focused and growing convenience food business”.
Coveney said Greencore was “delighted” with the way the company’s two acquisitons – On The Roll and UK desserts and sandwich maker Uniq – had been integrated into the group.
He added: “Whilst the UK and US food markets remain challenging, we are confident of being able to drive further growth and shareholder value through our close customer relationships, strong operational performance and outstanding products.”
