Impact of issues uncovered in Water business

    RNS Number : 4583X
  Greencore Group PLC
  25 June 2008
   

    GREENCORE GROUP PLC ("Greencore" or the "Group") announces that it has uncovered a deliberate concealment of costs at its Mineral Water
business which has led to a material misstatement of financial performance covering the financial years 2006, 2007 and the current financial
year. Whilst its investigations are ongoing, the Board of Greencore believes that the financial implications of these issues will lead to a
restatement reducing the Group's operating profit by EUR4m for 2006 and by EUR8m for 2007. In addition, the estimated impact of this issue
in 2008 will be a reduction of operating profit of EUR9m relative to current expectations, with a consequent impact on adjusted earnings per
share of 4 cents.

    Since this issue was first identified, the priority of the Board has been to move quickly to determine the cause, extent and impact of
the concealment. The key steps in this process were:

 1.  June 6th:      After a scheduled review by the internal audit function, a
                 source of potential concern in the Mineral Water business was
                              communicated to Group senior finance management.

 2.  June 9th:     Following a meeting between the leadership of Group finance
                    and the finance director of the Mineral Water business, an
                     immediate investigation was instigated by the Group chief
                                                            financial officer.

 3.  June 13th:  As the initial elements of this investigation were completed,
                      the Greencore Board was advised on the potential issues.

 4.  June 20th:    A report containing a provisional analysis of the financial
                     accounts for the three years in question, identifying the
                  concealment issues, sharing the external financial and legal
                         advice, and setting out options on how to proceed was
                                                       submitted to the Board.

 5.  June 23rd:       Both the Audit Committee and the Board met to review the
                   report, consider the issues in it, assess options on how to
                        proceed and identify critical outstanding points to be
                                                                    clarified.

 6.  June 24th:  The Board met to conclude on the financial impact of the
                 concealment and to take further legal and financial advice on
                 how to proceed.

    The investigation indicates that this concealment of costs was undertaken by the former financial controller of the Mineral Water
business who left the business prior to the concealment being uncovered. The three managers with direct supervisory responsibility for the
former financial controller have left the business. A new managing director and acting finance director for the Mineral Water business have
been appointed.

    The Group is taking legal advice on what, if any, elements of this financial impact can be recovered.

    While the Board believes this to be an isolated issue, it is conducting a thorough review (independently supported by KPMG) of all the
Group's businesses and of its internal control, financial reporting and external audit processes.

    Apart from adjusting for the impact of this material misstatement, the Board, based on current trading, remains confident that it will
meet consensus market expectations for 2008 EPS performance.

    For further information, please contact:
 Patrick Coveney, Group Chief Executive
                                                           +353 (0)1 605 1045
 Geoff Doherty, Chief Financial Officer
                                                           +353 (0)1 605 1018
 Eoin Tonge, Group Capital Markets Director
                                                           +353 (0)1 605 1036
 Billy Murphy or Anne-Marie Curran, Drury Communications
                                                           +353 (0)1 260 5000
 Rory Godson or Elizabeth Rous, Powerscourt
                                                          +44 (0)207 250 1446

    Greencore Group
 -  A leading international producer of convenience food, as well as an
    established ingredients supplier with operations in Ireland, the UK, the
    US, The Netherlands and Belgium
 -  Strong market leadership positions in the UK convenience food market
    across sandwiches, chilled prepared meals, chilled soups and sauces,
    ambient sauces & pickles, cakes & desserts, mineral water and Yorkshire
    puddings
 -  Extending presence outside the UK with fast-growing convenience food
    businesses in the US, The Netherlands and Ireland
 -  A leading malt producer in Ireland, the UK and Belgium
 -  Significant property assets in Ireland and the UK

    Greencore Mineral Water
 -  The leading mineral and spring water producer in the UK with sources in
    both Scotland and Wales
 -  Largest mineral water facility in Scotland
 -  Produces more than 200 million units per annum
 -  Broad customer base across major UK retailers 


This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
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