Ireland-based food group Greencore said this morning (12 February) that profits remain “in line” with its last fiscal year but warned that the weak pound would continue to weight on earnings and sales.
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The company, which makes a range of sandwiches, cakes and convenience food, said it expects to generate “a more significant proportion” of annual earnings from the second half of its fiscal year than it did last year.
Greencore, which reports around 80% of its operating profit in sterling, said the fall of the pound against the euro would weigh on earnings during its financial year.
“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 EUR8m (US$10.3m), and profit before tax by circa EUR6m,” Greencore chairman Ned Sullivan will tell the company’s AGM today.
Lower demand for some of Greencore’s UK convenience foods has led to “tough” trading conditions in the market, the company said, although it reported a 5.1% rise in sales at constant currencies.
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By GlobalDataMeanwhile, Greencore said recent restructuring initiatives, including the closure of its frozen desserts site at Crosshills in the UK and the exit from a grain and agri-trading business in Ireland, would lead to a one-off charge of EUR18m this fiscal year.
Greencore is set to announce its half-year results in May.
