Interim Management Statement


 

TIDMGNC 
 
RNS Number : 3518X 
Greencore Group PLC 
13 August 2009 
 
GREENCORE GROUP PLC - INTERIM MANAGEMENT STATEMENT 
 
 
13 August 2009 
 
 
Greencore Group plc ('Greencore' or the 'Group') today issues the following 
Interim Management Statement in accordance with the reporting requirements of 
the Transparency Regulations, 2007. 
 
 
Operating Performance 
In our half year results announcement in May we highlighted that the Convenience 
Foods division had recorded an improvement in the second quarter of the 
financial year over the performance of the first quarter. This trend has 
continued in the period since. In the four months to 24 July 2009 Convenience 
Foods sales from continuing businesses* of EUR278.1m were 2.5% ahead of the same 
period last year on a constant currency basis.  The UK portfolio was ahead by 
1.8% overall with increases in food-to-go, prepared meals and ambient cooking 
sauces offsetting a decrease in cakes & desserts.  The Group's US business is 
performing well with underlying sales 43% ahead of last year but continental 
European sales were behind by 9% reflecting a weaker consumer environment in The 
Netherlands. 
 
 
The UK environment remains challenging although there has been a slight 
improvement in consumer sentiment in recent months.  Volumes in our UK chilled 
foods portfolio increased by 4.4% in the four months to July over the comparable 
period in the previous year.  Value remains a key consumer theme and the Group's 
private label offering is delivering well in meeting this need.  Initiatives 
undertaken by the Group in the early part of FY09 to re-align the cost base with 
the prospect of weaker demand have underpinned performance in recent months. 
Additionally, good weather in the early part of the summer helped deliver good 
sales performances in our food-to-go sandwich, salad and sushi offerings as well 
as in our quiche bakery business.  In this environment our agenda 
remains focused on the delivery of value, driving innovation and relentless 
attention to our cost base. We continue to make progress, in particular, on 
reducing the Group's indirect cost base delivering 20 basis points of margin 
accretion in our UK Convenience Foods business in the year to date. 
 
 
Our US Convenience Foods division is performing well recording 43% underlying 
sales growth year on year in the four months to 24 July.  A highlight of the 
last four months has been a positive consumer response to the pre-packaged 
sandwich offering that we are testing at two leading US retailers. Further 
programmes to convert existing 'made-in-store' ranges at our customer stores to 
pre-packaged chilled offerings manufactured by our facilities are planned for 
the coming months. 
 
 
In the Ingredients & Related Property division we highlighted at our half year 
results announcement that the environment in Malt was challenging with a 
backdrop of weaker UK beer volumes, in particular, impacting Malt demand. In the 
period since there has been, as expected, a slight recovery but volumes are 
still comparatively weak.  More favourable energy pricing, in particular, is 
offsetting some of the year on year impact of this with Malt expected to deliver 
a solid performance for the year. 
 
 
Whilst sterling has recovered somewhat against the euro in recent weeks the 
average rate in the four months to July 2009 was 9.3% weaker than the same 
period last year which impacts on the translation of the Group's sterling 
denominated activities. 
 
 
Financial Position 
 
 
The Group is well capitalised to meet the operational and development needs of 
the business. The priority of converting operating profits into free cash flow 
remains. Additional final deferred consideration of $4.5m was paid in June 2009 
in respect of the FY08 acquisition of Home Made Brand Foods Inc.. 
 
 
*excluding discontinued Frozen Desserts activity 
 
 
 
 
Outlook 
 
 
Trading in the first ten months of FY09 has held up well in challenging 
conditions with Group operating profit ahead of the same period last year on a 
constant currency basis.  On a full year basis, the Group now expects to deliver 
full year operating profit modestly ahead of FY08 on a constant currency basis 
albeit with some seasonally significant weeks remaining. 
 
 
Overall, the Group is on track to deliver the current consensus of market 
expectations of 16.4 cent at the adjusted EPS level for FY09. 
 
 
 
 
FOR FURTHER INFORMATION, PLEASE CONTACT: 
 
 
+----------------------------+--------------------------+------+------------------+ 
| Geoff Doherty              | Chief Financial Officer  | Tel: | +353 1 605 1018  | 
|                            |                          |      |                  | 
+----------------------------+--------------------------+------+------------------+ 
| Eoin Tonge                 | Group Capital Markets    | Tel: | +353 1 605 1017  | 
|                            | Director                 |      |                  | 
+----------------------------+--------------------------+------+------------------+ 
| Billy Murphy or Anne Marie | Drury Communications     | Tel: | +353 1 260 5000  | 
| Curran                     |                          |      |                  | 
|                            |                          |      |                  | 
+----------------------------+--------------------------+------+------------------+ 
| Elizabeth Rous or Rob      | Powerscourt              | Tel: | +44 207 250 1446 | 
| Greening                   |                          |      |                  | 
|                            |                          |      |                  | 
+----------------------------+--------------------------+------+------------------+ 
 
 
 
 
Greencore Group 
 
 
  *  A leading international producer of convenience food with operations in the UK, 
  the US and The Netherlands 
  *  Strong market leadership positions in the UK convenience food market across 
  sandwiches, chilled prepared meals, chilled sauces and soups, 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 
  *  An established ingredients supplier with leading market positions in malt 
  production for the brewing and distilling industries in Ireland, the UK and 
  Belgium 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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