Food group endures testing times
GREENCORE Group, the food manufacturer which employs more than 3,000 people in Yorkshire, posted a rise in half-year profits but said that fluctuating currency and a rise in costs could affect full year results.
The group said that sales were up 2.5% to €648.7m whilst operating profits rose 2.5% to €41.1m for the half year ended March 28, 2008.
The Irish-based group has four main operations in Yorkshire – Greencore Cakes and Desserts in Hull; Greencore Grocery in Selby, which produces sauces, dips and condiments, Sheffield-based Greencore Prepared Foods, which concentrates on quiches, tarts and Weight Watchers Foods; and Yorkshire pudding business Greencore Frozen Foods, which has operations in West Yorkshire.
The operations supply major supermarket chains including Tesco, J Sainsbury and Asda.
Like other food manufacturers the group said it was battling rising costs in what are “testing” economic times.
The group praised a strong performance from its convenience foods division but said it was expected to deliver modest profit growth in the second half of the year.
Chief executive Patrick Coveney said that the group was well placed to continue to perform well, adding that it had invested more than £250m in it production
He said: “The bedrock of our business is the quality of our manufacturing facilities. In an era of ever increasing focus on efficiency and costs our facilities are a source of competitive advantage to us. Our Cakes and Desserts facility in Hull, with three production zones is unrivalled in the category and our Ambient Grocery facility in Selby is the largest cooking sauce facility in Europe. “
Mr Coveney added: “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. On a constant currency basis, we delivered strong double digit growth in sales, profit and EPS. Furthermore, we acquired Ministry of Cake and Danone Flavoured Water, both in the UK, in December and Home Made Brand Foods, in the USA, in April. These acquisitions are bang in line with our strategy of extending our category leading businesses in the UK and entering the US chilled food market in the right way.”
The board of directors is recommending that the interim dividend be increased by 5% to 5.30 cents a share.
