Interim Management Statement


 

TIDMGNC 
 
RNS Number : 0016H 
Greencore Group PLC 
11 February 2010 
 
    INTERIM MANAGEMENT STATEMENT AND CHAIRMAN'S ADDRESS TO THE ANNUAL GENERAL 
                                    MEETING 
 
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.  The Chairman, Ned Sullivan, will present 
this at the Annual General Meeting taking place in the Crowne Plaza Hotel, 
Northwood Avenue, Santry, Dublin 9, at 11.00 am today. 
 
The Group delivered a good performance overall in 2009 against the backdrop of a 
challenging consumer environment, which was particularly evident in the first 
quarter of the year.  Adjusted EPS* for the Group was 17.4 cent which was in 
line with 2008 on a constant currency basis but was down by 14.3% on the 
comparative amount for 2008 of 20.3 cent. However, firm foundations have been 
laid for the future. The last twelve months has seen significant progress in the 
Group with particular highlights being a more consistent and improved trading 
performance quarter on quarter, continuing momentum in the US, an executive and 
management team achieving real impact in the business and portfolio change 
consistent with the Group's strategy. This positions the Group very well for 
both the short and medium term. 
 
The Group has recorded a very strong start to the current financial year in 
Convenience Foods with most category businesses experiencing both sales and 
operating profit growth year on year.  It should, however, be noted that this 
comparison is against weak market conditions in the early part of our 2009 
financial year.  Sales in the first quarter of FY10 of EUR220.2m were 6.5% ahead 
of the first quarter of last year on a constant currency basis. UK sales 
(excluding Water) were 7.8% ahead year on year on a constant currency basis. In 
particular, the Food-to-Go and Prepared Meals categories are showing strong year 
on year growth. First quarter sales in the US were 30% ahead of the same quarter 
of 2009 driven by continuing positive customer and consumer take up of our fresh 
food offering. Additionally, we continue to build on the progress made in FY 09 
of increasing operating margins in Convenience Foods to more acceptable levels. 
 
Our Ingredients and Related Property division has performed in line with our 
expectations year to date. In line with previous guidance we remain cautious 
about the prospects for malt demand in the current year against the backdrop of 
the decline in European beer sales and reduced demand from distillers. Year to 
date malt margins have been supported by lower year on year energy pricing and 
good carryover volumes which were not delivered in the previous financial year. 
 
Currency translation is having a less pronounced impact on year on year 
comparisons than in the previous two financial years.  The EUR/GBP exchange rate 
in the first quarter was 0.897 compared to 0.86 in the first quarter of the 
previous year with the year on year differential narrowing further in recent 
weeks. 
 
* Before exceptional items, amortisation of intangibles, inter-company foreign 
exchange gains/losses and the movement in the fair value of all derivative 
financial instruments and related debt adjustments 
 
The Group has a well capitalised balance sheet which is sufficient to meet the 
operational and development needs of the business.  In April 2009, the Group 
secured a new three year bank debt facility of EUR360m with a group of 
international banks and concluded a new two year bi lateral facility of EUR50m in 
August 2009. On that basis, all 2010 maturities have either been fully 
refinanced or repaid.  This refinancing, a significant component of which is 
undrawn, provides the Group with the capacity for future growth. 
 
Earlier today your Board was pleased to announce that it has agreed to sell the 
Group's Malt business to Axéréal Union De Coopératives Agricoles for 
consideration of up to EUR116.25 million, subject, inter alia, to shareholder 
approval having been obtained. This proposed disposal is consistent with the 
Group's strategy to develop its core Convenience Foods business in the UK and 
the US and it will provide the Group with additional balance sheet strength and 
management focus from which to do this. A circular containing further details 
relating to the proposed disposal and convening an Extraordinary General Meeting 
will be posted to shareholders shortly. Subject, inter alia, to shareholder 
approval having been obtained, the Group expects to complete the disposal of its 
Malt business in late March 2010. 
 
The disposal of the Group's Water business is scheduled to complete before 30 
April 2010 as outlined in our market announcement of 19 November 2009. 
 
The Group has made a strong start overall to FY10 with very strong year on year 
earnings growth in Convenience Foods and performance in line with expectations 
in our Ingredients & Related Property division more than offsetting the impact 
of higher interest costs year on year associated with the Group's 2009 
refinancing.  As highlighted previously, however, the Convenience Foods 
comparison is against a weak comparative period in 2009. As we move through the 
remainder of the financial year we will be comparing against the improving 
performance we experienced in Convenience Foods from quarter two onwards in 
FY09.  In addition, it is still early in the financial year and although 
encouraged by our recent trading performance we remain appropriately cautious 
about the consumer environment for the remainder of the year.  Taking account of 
all of the above the Board is confident about the prospects for the Group in the 
year ahead and beyond. 
 
 
E.F. Sullivan 
 
Chairman 
 
11 February 2010 
 
 
 
 
FOR FURTHER INFORMATION, PLEASE CONTACT: 
 
+------------------------------------+------------------------+ 
| Geoff Doherty                      | Tel:  +353 1 605 1018  | 
| Chief Financial Officer            |                        | 
|                                    |                        | 
+------------------------------------+------------------------+ 
| Imelda Hurley                      | Tel:  +353 1 605 1039  | 
| Head of Investor Relations         |                        | 
|                                    |                        | 
+------------------------------------+------------------------+ 
| Billy Murphy or Anne Marie Curran  | Tel:  +353 1 260 5000  | 
| Drury Communications               |                        | 
|                                    |                        | 
+------------------------------------+------------------------+ 
| Elizabeth Rous or Rob Greening     | Tel:  +44 207 250 1446 | 
| Powerscourt                        |                        | 
|                                    |                        | 
+------------------------------------+------------------------+ 
 
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 and Yorkshire puddings. 
·      Extending presence outside the UK with fast-growing convenience food 
businesses in the US. 
·      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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