Greencore eyes hot food and ‘in-store theatre’ in UK
UK’s biggest sandwich maker seeks to remain relevant as chief Coveney outlines plans
Greencore chief executive Patrick Coveney. Photograph: Dara Mac Donaill
Greencore chief executive Patrick Coveney said on Tuesday that the UK’s biggest sandwich maker is preparing to make a big play on hot food and “in-store theatre” as it seeks to remain relevant as consumers continue to change their habits.
“We want to extend our food-to-go product range in a more accelerated way beyond sandwiches,” Mr Coveney told The Irish Times after the company reported its adjusted profit rose by 0.9 per cent in the first half of its financial year to £44.9 million (€51.2 million).
Earlier in the day, he told analysts that Greencore has “a conviction that hot eating is going to be hugely important in immediate consumption food”.
“In order to get into that, it’s going to bring us into technology, equipment, partnership, service, [and] a set of capabilities that we’re experimenting with,” he said.
In addition, “in-store theatre”, from cafes to sushi counters, is becoming an increasingly important to grocery stores that Greencore sells into, he said.
Greencore has become more dependent on the UK after Mr Coveney, who has led the group for more than a decade, sold its US operation last November to Heartside Foods, the country’s largest maker of nutritional and snack bars for major brands, for $1.075 billion (€960 million).
In January, the group moved to distribute £509 million of proceeds from the US sale to investors by way of a tender offer for shares, having abandoned a previous plan to disburse money by way of a special dividend. Shareholders had complained about the tax implications of a dividend payment.
Mr Coveney said that the group is planning to engage in multiple small acquisitions in the coming years “that we will play to one or ideally several of our product initiatives, channel initiatives and capability initiatives as we go forward”.
Greencore’s pro-forma revenue growth from continuing operations rose by 5.4 per cent in the six months to the end of March, driven by 7 per cent expansion in food-to-go categories as its ready meals business posted a weaker.
Greencore moved in the wake of the US deal to restructure its debt and associated financial derivatives portfolio “to reflect the removal of US dollar assets from the business and also refinance its primary sterling bank debt agreements”. The company booked a £25.4 million exceptional charge for this during its first half.
Net debt stood at £284.1 million, having fallen by £217 million during the period. Greencore also unveiled an 11.4 per cent increase in its interim dividend, to 2.45p.
The group also said that it has appointed Peter Haden, previously head of the UK division, as its chief operating officer. He has joined Greencore’s board as an executive director with effect from Tuesday.