Greencore sterling hurt
Greencore says its annual results are "in line” with last year but fears the current sterling-euro exchange rate will continue to erode profits
18 April 2009 | 0
Irish-based food company Greencore has said its annual results are, so far, “in line” with last year but is concerned that the current sterling-euro exchange rate will continue to erode profits.
The company supplies prepared chilled, baked and convenience foods to the UK, but said that demand had lessened in that market, which it describes as being “tough” at present.
“If the EUR/GBP level were to continue in the 0.88 to 0.90 range for the rest of the current financial year, the translation effect year-on-year would reduce group operating profit by circa €8 million, and profit before tax by circa €6 million,” said Greencore chairman Ned Sullivan.
Recent restructuring initiatives, which include the closure of its frozen desserts site at Crosshills in the UK, and its exit from a grain and agri-trading business in Ireland, have resulted in a one-off charge of €18 million this fiscal year.
The company, which is due to announce its half-year results in May, expects to generate “a more significant proportion” of annual earnings from the second half of its fiscal year than it did in 2008.