Greencore: US chilled foods market ‘worth billions’

By Mike Stones

- Last updated on GMT

Related tags Revenue Minsterley

Going west – to build its US businesses, could be worth billions to Greencore and its ceo Patrick Coveney
Going west – to build its US businesses, could be worth billions to Greencore and its ceo Patrick Coveney
Anglo Irish convenience food manufacturer Greencore sees “huge potential for expansion” in the US chilled food market, according to its chief financial officer Alan Williams.

Speaking to after the publication of the firm’s half year results for the period ended March 30 2012, Williams said: “The chilled food market in the US is underdeveloped – you would think of it as the home of convenience but it is much less developed than the UK.

“That offers huge market potential – particularly in food-to-go formats in small-store channels.”

Asked whether the firm was on track to deliver sales of $500M by 2015 – as predicted by Fergal Leamy who launched Greencore USA in 2008 – Williams replied: “The market potential is worth billions – but how quickly we will get there is another matter.”

Leamy made his prediction before the firm invested in Uniq and in different market conditions, he added.

Reshape our portfolio

Commenting in the financial statement, Patrick Coveney, ceo, said: “We have continued to reshape our portfolio, in particular in the US with the acquisition of MarketFare Foods in April. This acquisition represents the next step in building a business of real scale in the US and strengthens our position in the food-to-go / convenience store channel.”

Coveney said the group was on track to deliver the benefits of integration after acquisition of Uniq last year. “Group revenues are up 50% on last year with like-for-like revenues ahead by almost 10%.

“When combined with good underlying margin performance across the enlarged group and the reduction in our effective tax rate, we have delivered an increase in group adjusted earnings of 75% and adjusted EPS [earnings per share] up almost 20%.”

Greencore was on track to integrate the Uniq business acquired last year, said the firm. Uniq’s Spalding salads business had been fully integrated into the Greencore Food to Go category

The Northampton sandwiches business is operating as a separate unit within the firm’s UK Convenience Foods.

Most of the planned contract exits in Minsterley in yogurts and everyday desserts have been completed.

Troubled Minsterley facility

The transfer of the production of premium dessert lines from its troubled Minsterley facility to Evercreech will be completed by the end of the year. The transfer will leave Minsterley “… focused on the contract packing of chocolate desserts under the Cadbury brand …”

Asked whether the firm planned to close Minsterley, Williams said: “We never say never but we are comfortable with the shape of the [Minsterley] business at present.”

The firm’s Cakes and Desserts business – which includes Foodservice Desserts – reported lower returns than in the same period last year reflecting input cost inflation and industry over capacity. But overall revenue was up 12.7%.

In the half year to March 30, group revenue increased by 49.9% to £567.7M, reflecting what the firm described as “strong underlying momentum”. 

Revenue from continuing activity was up 9.3% with the Convenience Foods division ahead by 9.7%.

Group operating profit was up by 36.7% reflecting the addition of the Uniq.

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