Board under attack at Greencore a.g.m.

Greencore annual general meetings have usually provided lots of entertainment and last week's event, by all accounts, was no exception. Joe Rea returned to continue his by-now traditional baiting of the Greencore board and chairman Bernie Cahill continued to show that he finds it difficult to manage difficult meetings without getting up the noses of dissident shareholders.

Going back years, the Greencore chairman has handled annual meetings with a brusqueness and lack of patience that antagonised shareholders who felt their concerns were not being taken to heart by a board that was failing to deliver - at least in terms of getting the share price back to a reasonable level.

Greencore has been trading at around €3.50 (£2.76), a long way off the €5.79 of last year and even lower than the €4.82 buyback price of this time last year. And even apart from the dismal share price performance, shareholders had other ammunition with which to attack the board this year, notably the investment in American sugar producer Imperial Holly.

Greencore spent a lot of money to build up a 27 per cent stake in Imperial Holly, only to see that stake heavily diluted when Imperial merged with another American sugar producer, Savannah. At last week's a.g.m. David Dilger finally conceded that the Imperial stake was no longer a strategic investment and would be sold when "the time is right".

The composition of the Greencore board - a gathering of the great and the good of corporate Ireland - has also irked some shareholders, particularly those who are also beet farmers. The preponderance of accountants or directors with a financial - rather than a food industry - background has also been criticised and certainly there is a view that fewer former plc chief executives and more food industry professionals would give the Greencore board a better balance.

Apart from Bernie Cahill, who has a long track record in the food industry, the non-executive directors include former chief executives of CRH (Tony Barry), New Ireland (Jack Casey), Waterford Crystal (Paddy Galvin), and the current chairman of United Drug and Readymix in the shape of Martin Rafferty. The other two non-execs are John Kinder, managing director of sugar trader ED & F Man, and Declan Scott, the former president of SmithKline Beecham's chemicals division in Britain.

All of these are very eminent individuals with a distinguished track record but some in the markets believe that Greencore might be just as well served by having some more food industry professionals at the top table taking the decisions.

Lips must have been bitten on the Greencore top table at last week's a.g.m. when one shareholder compared Greencore's share price and general level of performance unfavourably to Philip Lynch's at IAWS.

Certainly the ratings of the two food companies are dramatically different, with Greencore trading on less than 10 times Davy's 1999 earnings forecast, while IAWS is on a 15 times prospective earnings multiple. Enough said!