Greencore betters forecasts in spite of horse meat crisis
Greencore managed to deliver full-year results that were better than forecast despite the horse meat scandal having wiped out 10% of its ready-meal sales in the United Kingdom.
The Dublin-based company, which has its stockmarket listing in London, said that revenue in the 12 months to the end of September rose 3% to £1.19bn, while operating profit was up 8.1% at £76.5m ).
Greencore is one of the UK's biggest makers of ready-meals, desserts and sandwiches. Its customers include Tesco, Marks & Spencer and Asda. Each year it manufactures 150m ready meals, 42m quiches, three million Christmas cakes and 430m sandwiches.
It also has a growing footprint in the US where it supplies chains including Starbucks and 7-Eleven.
Chief executive Patrick Coveney said that the company had had a "good year", having delivered "clear commercial, strategic and organisational progress".
He added that revenue in the US had risen by 60% and that resources had been realigned behind a "food-to-go-led strategy".
"All this was achieved despite a weak UK consumer environment, limited growth in retail food markets, persistent input cost inflation and the negative impact of the horse meat scandal," he said.
However, Mr Coveney told analysts that the company had handled the horse meat scandal well, but conceded that it had an impact on its ready-meal business.
"It was a relief to conclude that our supply chain was not contaminated by horse meat. However, the impact on industry trust on consumer confidence and, ultimately, on ready-meal volumes was severe," he said.
"Our ready-meal volumes, which are heavily biased towards beef-based products, were hit by at least £50m relative to what they would have been in financial year 2013. That's 10% of our ready-meal sales or 1.5% of our overall UK revenues," he explained. "And clearly, that will have a material and had a material contribution and profit impact."