Greencore rules out food scares

A situation similar to that of the horse DNA crisis in the beef industry could not happen in Greencore, according to the outgoing chairman of the ready meals group.

Ned Sullivan told shareholders at the company’s annual general meeting in Dublin yesterday that thousands of audits are carried out each year at plants, internally, by customers, and externally, by regulatory bodies. “The reputation of the company is something hard-won. We do extensive risk management,” he said.

Shareholders were also told by company chief executive Patrick Coveney that Greencore is “well positioned” for the year ahead, despite challenging market conditions in the UK, as the company reported strong revenue growth for the 13 weeks to December 28th.

In its first trading update of 2013, the Irish company, which moved its listing to London last year, reported revenue of £298.9 million for the 13 weeks to December 28th.

Greencore’s own convenience food division recorded revenue of £285.8 million for the 13-week period to December 28th, an increase of 2.5 per cent on the same period the previous year. The company is now the biggest player in the “food to go” category in the UK, supplying major retailers and supermarkets including Waitrose, Tesco, Asda, Sainsbury’s, Morrisons and Marks Spencer.

The ingredients and property division, which represented 6 per cent of Group revenues in 2012, recorded revenues of £13.1 million, 11.6 per cent lower than the prior year.

Full-year results for the year ended September 28th, 2012, showed that revenue at the company increased by 45 per cent to €1.16 billion. Group operating profit rose 37.3 per cent to £70.7 million for the year.

Revenues in the US more than doubled during the 2012 financial year, Mr Sullivan said, reflecting the acquisition of MarketFare Foods and Schau. The group also created a new customer partnership with Starbucks.

In the UK, revenue was in line with the previous year on a like-for-like basis, reflecting the challenging food market there.

Chief executive Patrick Coveney said 2012 was a “breakthrough year” for the company, with adjusted earnings up more than 70 per cent and adjusted earnings per share up over 20 per cent.

More than 100 shareholders attended yesterday’s agm. Following questions from shareholders, Mr Sullivan said the company had no plans to move the AGM or headquarters to the UK anytime soon. “There are good tax efficiencies here,” he said.

A number of shareholders criticised the remuneration paid to senior executives, particularly the €1.7 million remuneration package Patrick Coveney is paid, saying it is considerably higher than the salaries and remuneration packages of executives in similar companies.