Greencore has reported an 8 per cent increase in full-year profit before tax and exceptional items to €73 million as a strong secondhalf performance helped offset a weak first half.
"It was very much a game of two halves," said finance director, Mr Patrick Kennedy, referring to the 5 per cent decline in earnings in the first half due to higher raw materials costs.
But he said the company "fired on all cylinders" in the second half, which helped it to post a 6 per cent rise in full-year earnings per share to 32.4 cents.
However, shares in the company fell by 10 cent, or 3 per cent, to €2.90 yesterday as the results fell slightly short of consensus forecasts. Investors also fretted about the challenges facing the company such as reform of the sugar regime, the loss of a major sugar contract with Nestle and a very competitive retail market in the UK.
Greencore said it expected to make "further progress" in the current year but conceded the environment for many of its businesses remained challenging.
"The group expects to offset this through the quality of its market-leading positions, the ongoing growth in its categories, a relentless focus on the cost base and the strong cash-generative nature of its portfolio," it said.
Its strong cashflow allowed it to reduce net debt by €43 million to €387 million, while its net interest was down 21 per cent to €32.5 million.
Greencore, which intends to continue prioritising debt-reductions, announced a final dividend of 7.58 cents, making for an unchanged full-year dividend of 12.63 cents.
Its convenience food division recorded a 4 per cent increase in like-for-like sales to €876 million, although operating profit declined by 6 per cent to €53.7 million, due to the lag in recovering higher raw material costs and an increase of almost €4 million in insurance costs.
However, the division faces an intensely competitive retail environment in the UK. While a small number of large supermarkets, such as Tesco, Asda, Sainsbury and Morrison/Safeway account for 71 per cent of its turnover, Greencore is working on developing alternative channels.
It is focusing on selling to convenience stores, forecourts, the food service business and airlines and ferries, and wants to boost this category to 35 per cent of sales against 29 per cent at present.
Turnover in its ingredients and agribusiness division was up by 4 per cent to €526 million, while operating profits rose by 4 per cent to €47 million and margins were steady at 8.9 per cent.
