Greencore courts overseas investment with UK listing

By Dan Colombini

- Last updated on GMT

Related tags: Stock market

Greencore ceo, Patrick Coveney, will be leading the firm's push for a place on the FTSE UK index
Greencore ceo, Patrick Coveney, will be leading the firm's push for a place on the FTSE UK index
Chilled foods group Greencore has moved to raise its profile among UK and international investors after announcing that it is cancelling its ordinary shares on the Irish Stock Exchange.

The firm is now seeking to be included on the FTSE UK series after first revealing its plans to switch following the £113M acquisition of dessert business Uniq in July.

In recent years, the profile of the operations of Greencore has changed from its Irish beginnings to one which now has the majority of its turnover, operating profits and producing assets derived from or located in the UK​,” a statement from the firm revealed.

In addition, the majority of the group's shares are now held by overseas investors. Greencore's board believes that FTSE UK index inclusion would result in a further increase in UK and international investor awareness of Greencore​.”

London Stock Exchange

As a result, the firm’s ordinary shares listed on the London Stock Exchange will trade in sterling (GBP) pence rather than in euros from January 20.

There will be no impact on the amount or the timing of any dividend payments as a result of the announcement and the cancellation is not subject to shareholder approval, according to the firm.

The FTSE Nationality Committee, which considers the qualification of shares for index eligibility will now meet to decide Greencore’s request on 7 February 2012.

Subject to the independent deliberations of the FTSE committees, Greencore said it expected to be included in the FTSE All-Share and the FTSE Small-Cap Indices from the start of business on March 19 next year.

‘Significantly undervalued’

Meanwhile last week, city analysts said that Greencore was “significantly undervalued​” following the firm’s third quarterly results for the period up to September this year.

The firm reported turnover up 8.7% to £804M in the year to September 2011. Like-for-like sales also climbed 4.3%, boosted by the performance of its Convenience Foods division. Pre-tax profits dropped to £12M from £26M last year.

Darren Shirley and Clive Black, analysts at Shore Capital stockbrokers said: “We believe Greencore is significantly undervalued, with a 2012 Price Earnings Ratio (PER) at 4.9 times, an earnings before interest, taxes, depreciation, and amortisation (EBITDA) of 4.9 times and a dividend yield of 8.2%.

This is more akin to a business in distress rather than one that in our view delivers differentiating value added products to its customers and is in the early stages of improving both profitability and importantly cash generation.”

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