Revenues jump at Greencore as shareholder rebellion fails to halt bonus plan

Revenues jumped by close to a quarter at food group Greencore in the first quarter, despite some limited impact on sales due to the Omicron variant.

Uncertainty over the duration and impact of Covid variants, particularly on the all-important “food to go” categories, however, has made it difficult to predict full-year trading performance, the sandwich maker said.

Greencore’s plan to pay out hundreds of thousands of euros in executive bonuses was met with strong opposition at its annual general meeting on Thursday, But the resolution was passed.

Shareholder adviser firms Glass Lewis and ISS had both suggested shareholders should reject the company’s remuneration report. They raised concerns over the appropriateness of bonuses being paid when the sandwich maker has not repaid any of the near £30 million (€36 million) it has received from the British government in supports.

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Greencore for its part has said no bonuses were paid out in 2020. However it told the Guardian that improving finances and the “outstanding contribution of the management team” last year meant that the executive bonuses were “considered by the board to be appropriate”.

Challenges

In a trading update issued prior to the agm, Greencore said supply chain and labour challenges remain elevated across the UK food industry, exacerbated by the impact of the Omicron variant. Though these challenges persist, the company said it continues to expect results to be in line with market expectations, providing restrictions are not reintroduced.

“Profitability will be heavily weighted towards the seasonally important second half of the year,” the company said as it reported sales of £389 million (€465.7 million) in its fiscal first quarter.

Food-to-go revenues increased 34.9 per cent year-on-year to £254.3 million in the first three months of fiscal 2022, the company said. Sales growth in other convenience categories was 8.5 per cent higher at £134.7 million.

"I am encouraged by the progress that we have made during the first quarter in what continued to be a challenging trading environment. We remain focused on rebuilding our economic model effectively and sustainably with all stakeholders, thereby positioning the company for a strong future," said chairman Gary Kennedy.

Greencore said the search for a successor to chief executive Patrick Coveney continues. Mr Coveney is departing the company at the end of March to take up the same role at airport caterer SSP.

Greencore is due to report first-half results on May 24th.