Consumer caution to continue, says Greencore

24th May 2011 14:43

The cost of convenience foods group Greencore's rebuffed courtship of Northern Foods put a serious dent in the Irish firm's interim profits. Profit before tax and exceptional items surged to €20.13m in the half year to 25 March, from €10.7m the year before. However, the company's exceptional charge, related to the costs associated with the abortive merger with Northern Foods, was chunky, at €13.6m.Revenue rose 7.9%, or 4.4% on a constant currency basis, to €441.8m from €409.5m the year before.Trading in the UK was challenging in the first half of the group's financial year, though there was some pick-up in March, which carried through into April.Greencore is anticipating that the consumer environment will remain subdued for the remainder of the calendar year."Against this backdrop, trading in our core Convenience Foods business was solid during H1'11 [first half of fiscal 2011] with growth ahead of the market in our largest businesses," the group said.Input cost inflation is now running at more pronounced levels than at the start of the current financial year and managing its impact will remain a key area of management focus in the second half. With continued good revenue growth coupled with a material reduction in interest charges the board anticipates delivering adjusted earnings per share (EPS) in line with market expectations."Our business continues to perform well, despite some of the recent challenges in the UK and US food markets," said group chief executive officer, Patrick Coveney. "We are delighted to have delivered sales growth for the first half of 7.9%, and in particular to have driven this through to a 42% growth in continuing adjusted earnings per share," Coveney added.Adjusted EPS rose 35.4% on a constant currency basis to 6.8 cents.The interim dividend has been maintained at 3 cents.---jh