14th Feb 2008 07:00
Greencore Group PLC14 February 2008 GREENCORE GROUP PLC INTERIM MANAGEMENT STATEMENT AND CHAIRMAN'S ADDRESS TO THE ANNUAL GENERAL MEETING GREENCORE GROUP PLC ("Greencore" or "the Group"), one of Europe's leadingconvenience food and malt producers, today issues the following interimmanagement statement which the chairman, Ned Sullivan, will present at itsAnnual General Meeting taking place in the Conrad Hotel, Earlsfort Terrace,Dublin 2, at 11.00am today: Greencore's portfolio performed very well in 2007, the first year following itsexit from sugar processing activities. On a continuing basis, the Groupdelivered a 22% improvement in operating profit (from EUR74.6m to EUR91.0m) anda 50% increase in adjusted earnings per share (from 19.9 cent to 29.8 cent).The progression in underlying earnings, together with a significantstrengthening of the Group's capital position (an increase of EUR99.4m inshareholders equity year-on-year), has resulted in the Board recommending arecommencement in dividend growth. The Convenience Foods division performed well in the first half of FY07.However, profit declined 16% in the critical second half period, primarily dueto the impact of unseasonal summer weather and strong raw material inflation inthe final quarter. On a full year basis, turnover rose 4% to EUR933.1m andoperating profit fell 7% to EUR64.4m. For the current financial year, managingsignificant food inflation has become a key challenge for all players in theglobal food industry. To date, our Convenience Foods division has beensuccessful in working with customers to offset this impact (estimated to total8-10% of our cost of goods). Underlying consumer demand for our products heldup well in the first quarter, although there was some evidence of a limitedconsumer slowdown in January. Despite these impacts, we expect the successfuldelivery of our strategic, operational and commercial initiatives to drivestrong growth (on a constant currency basis) in FY08, albeit with thecontribution of the second half of the year more pronounced than in prior years. The Ingredient & Related Property division made considerable progress last year,delivering operating profit from continuing operations of EUR26.6m, an increaseof 372% over the prior year. The key driver was the strong recovery in all ourIngredients businesses, but most especially in Greencore Malt. This recoveryhas continued through the first quarter of the current financial year, withstrong growth expected (on a constant currency basis) for the full year. Last year, we made excellent progress in enhancing the zoning and planningstatus at each of our four significant property assets in Mallow, Carlow, Athyand Littlehampton. We continue to work with the relevant local authorities todeliver the full potential of these properties for both local communities andshareholders. In January 2008, the Irish Government informed the Group of its decision toallocate 87.3% (representing a total of EUR127.0m) of EU restructuring aid toGreencore. This followed the Group's successful legal challenge of theGovernment's original allocation decision of July 2006. The revised allocationwill result in a final instalment of EUR83.4m to be paid at the end of Februarythis year, thereby further strengthening the Group's capital position. TheGroup will book an exceptional profit of at least EUR15m in its Interim Accountsto reflect the increased value of the EU restructuring aid payable to Greencore(EUR127.0m versus EUR112.1m disclosed in the 2007 financial statements). Wecontinue to make good progress in the delivery of our restructuring plan, thecosts of which have already been accounted for in the 2007 financial statements. Approximately 80% of total operating profit is expected to be delivered insterling (with revenues and costs similarly denominated) and the change in theEUR/GBP exchange rate seen in recent months will impact the year-on-yeartranslation of our results. If the EUR/GBP level were to continue in the 0.74to 0.75 range for the rest of the current financial year, the translation effectyear-on-year would reduce Group operating profit by c. EUR8m, and profit beforetax by c. EUR6m. Overall, we are happy with the outlook for the Group's portfolio in FY08 andbeyond. While recognising that the second half of the year is a much moresignificant contributor to Group profits, and allowing for the anticipatedcurrency translation effect, the Board remains comfortable with current marketexpectations. Finally, at this, his final AGM, I would like to pay tribute to the leadershipand achievements of David Dilger. David has been chief executive since 1995and, supported by the executive team that he has built, he has transformedGreencore into one of Europe's leading convenience food producers. In doing so,he demonstrated vision, clarity of direction, a passion for our business andunrelenting personal commitment. He leaves behind a robust, well-positionedbusiness and a high performing business culture. We are very grateful for hiscontribution. E.F. Sullivan Chairman 14 February 2008 For further information, please contact: Patrick CoveneyChief Financial Officer | Chief Executive Officer Designate +353 (0)1 605 1018 Eoin TongeGroup Capital Markets Director +353 (0)1 605 1036 Billy Murphy or Anne Marie CurranDrury Communications +353 (0)1 260 5000 Rory Godson or Elizabeth RousPowerscourt +44 (0)20 7236 5615 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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