22nd May 2018 09:48
LONDON (Alliance News) - Greencore Group PLC said Tuesday that exceptional charges relating to closure of a US production facility resulted in a pretax loss for the first half of its 2018 financial year.
The sandwich maker also reiterated its annual adjusted earnings per share guidance range of 14.7 pence to 15.7p. In the first half to March 31, it recorded adjusted earnings per share of 5.5p, down from 6.3p.
Shares in the company were trading 11% higher at 173.80 pence each.
Greencore recorded a pretax loss of GBP18.1 million for the first half compared with pretax profit of GBP11.7 million in the year ago period, on a revenue of GBP1.24 billion and GBP1.01 billion, respectively.
Profit, before tax and exceptional items, totalled GBP35.0 million versus GBP34.6 million. Exceptional items, including costs related to closure of a production site in the US state of Rhode Island, totalled GBP53.1 million versus GBP22.9 million a year ago.
The company's UK & Ireland unit recorded 7% growth in first half revenue to GBP734.9 million. Adjusted operating profit rose marginally to GBP47.1 million from GBP46.8 million.
The US unit posted 55% growth in revenue to GBP503.6 million. Adjusted operating profit jumped 48% to GBP12.6 million from GBP8.5 million.
The sharp earnings growth in US unit was primarily attributed to the acquisition of Peacock Foods in December 2016. The company curtailed production at the Rhode Island facility during the period to address continued and increased operating losses.
"While we delivered strong revenue growth in both the UK and US, profit growth was impacted by the challenges experienced in the original part of Greencore's US division. As a result of the significant strategic, network and organisational measures that we have taken in order to address these challenges, we believe that our US business is now much better positioned to deliver an improved performance in the second half of the year and beyond. We anticipate strong organic growth for the remainder of FY18 [2018 financial year]", said Chief Executive Patrick Coveney.
The convenience food producer declared a dividend of 2.20 pence per share for the first half, up 4.8% from 2.10 pence paid a year ago.
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