Greencore's said this morning that sugar profits will be affected this year by the uncertainty surrounding the EU's sugar reforms but its move into convenience foods should bolster profits.
"A consequence of the reformed EU Sugar regime agreed last November is that neither sugar growing nor processing have a long-term future in Ireland," Greencore said in its annual statement to shareholders.
"Greencore is planning for a 2006/2007 processing campaign but our ability to do this is dependent on a number of factors, including the certainty of a full beet crop and clarification on some important regulatory issues.
"The Greencore Sugar team is in active discussions to resolve these issues and will make a final decision as soon as possible but in any event by early March. The outcome of these discussions will impact on divisional profitability in 2006, but more significantly in 2007," the statement added.
On a more positive note Greencore said that its convenience foods division, which represents nearly two thirds of group's profits, performed strongly, with like-for-like profits up 16.4 per cent to €67.7 million.
The group noted that many of the positive trends observed in convenience foods in 2005 have continued into 2006 and the division is performing well.
" We expect to deliver above market growth rates. Against a background of demanding trading and input cost environments, our strong market positions and execution skills are ensuring that margins are maintained," Greencore said.