Greencore is considering a possible move into the US convenience foods sector and executives from its UK division are in the US conducting appraisal studies.
"An announcement is not imminent" but the group believes the next best place for it to develop its convenience foods business is the US, said chief financial officer Patrick Coveney yesterday at the announcement of Greencore's results for the 2006 financial year.
Excluding exceptionals, Greencore's operating profit from continuing operations was €74. 6 million in the year to September 29th, 2006, compared to €74.7 million the previous year.
A further €22 million in pretax profits arose from the group's now discontinued sugar operations.
When asked how long it was expected it would take before the group's profits had returned to sugar-era levels, chief executive David Dilger said: "It certainly won't happen in 2007 but our intention is to make it happen pretty quickly after that."
Turnover from continuing operations was €901.4 million, an increase of 8.3 per cent on the €832.6 million figure for 2005. The adjusted earnings per share were 31.1 cent, down from 32.5 cent in 2005, and the dividend per share remained at 12.63 cent.
Mr Coveney said the group made 92 per cent of operating profits from convenience foods and sales had grown by more than twice the level of the underlying UK grow levels in the sector. Margins (7.7 per cent) had been maintained despite a €5 million increase in energy costs during the period. The business had had a strong second half and the momentum was being maintained, he said.
Mr Dilger said the convenience food sector was growing because of strategy - choosing of what foods to become involved with - and operational issues such as service, cost reductions, and innovations.
He said the group was constantly relaunching its products and was "ahead of the pack" when it came to introducing more healthy and wholesome ingredients.
Consumers were prepared to pay more for quality food.
The group produces 3,500 convenience food products, of which 54 per cent had been relaunched during the year, he said.
On the group's plan for its development properties, Mr Dilger said an expert team was working on maximising the value of each site.
He would not comment on the general issue of the group's moving into a new operational area.
"I would like to take this one baby step at a time." As well as having major sites in Mallow and Carlow, the group has 15 smaller Irish sites that it believes have development potential.
Mr Coveney, commenting on the possible move into the US, said most US retailers felt the chilled food market there would develop.
The UK was generally considered to be the most developed chilled food market in the world, and Greencore was one of the best, if not the best, producers there, he said.
