9th Feb 2006 07:00
Greencore Group PLC09 February 2006 GREENCORE GROUP PLC ANNUAL GENERAL MEETING CHAIRMAN'S SUPPLEMENTARY STATEMENT At the Annual General Meeting of Greencore Group plc to be held today, thechairman, Ned Sullivan, will make the following statement: Greencore made significant progress in 2005. Profits before tax, amortisationand exceptional costs grew by 6.4%, headline earnings per share grew by 4.3%,and the Group continued to demonstrate strong cash generation characteristics. The Ingredients division, however, faced a particularly challenging marketenvironment in 2005. The uncertainty surrounding the EU sugar regime andsignificant over-capacity in EU malt markets led to a reduction in divisionaloperating profits of 11.2% to €41.4m. Management actions ensured that cashgeneration continued to be strong. The level of uncertainty and pricing pressure observed in European sugar marketsin 2005 has increased significantly in 2006 as processors position themselvesfor the post reform marketplace. This will impact negatively on the 2006performance of the Ingredients division. A consequence of the reformed EU Sugarregime agreed last November is that neither sugar growing nor processing have along-term future in Ireland. Greencore is planning for a 2006/2007 processingcampaign but our ability to do this is dependent on a number of factors,including the certainty of a full beet crop and clarification on some importantregulatory issues. The Greencore Sugar team is in active discussions to resolvethese issues and will make a final decision as soon as possible but in any eventby early March. The outcome of these discussions will impact on divisionalprofitability in 2006, but more significantly in 2007. The Convenience Foods division, which represents nearly two thirds of theGroup's profits, performed strongly, with like-for-like profits up 16.4% to€67.7m. The Group competes in attractive categories and our strategy ofcombining aggressive product innovation, broad channel exposure and 'TotalLowest Cost' drove like-for-like sales growth of 7.5% and sustained healthymargin performance. This represents excellent progress and, with the divisionnow accounting for 62% of Group continuing operating profit, up from 56% in2004, this division represents the future of Greencore. Many of the positive trends observed in Convenience Foods in 2005 have continuedinto 2006 and the division is performing well. We expect to deliver abovemarket growth rates. Against a background of demanding trading and input costenvironments, our strong market positions and execution skills are ensuring thatmargins are maintained. In summary, the Board is confident about the future prospects of the Group.Whilst there will be significant change in the Ingredients portfolio in the nearterm and a resulting impact on the profitability of that division, the currentperformance and long term prospects of Convenience Foods provide cause foroptimism. Over time, we expect to be able to exploit more fully our marketleading positions in Convenience Foods, with the business benefiting from anincreased focus and investment. E.F. SullivanChairman 09 February 2006 CONTACT:Patrick Coveney, Chief Financial Officer Tel: +353 1 605 1018 (up to 10am)Billy Murphy/Joe Carmody, Drury Communications Tel: +353 1 260 5000Mark Garraway/Anthony Parker, College Hill Tel: +44 207 457 2020 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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