Greencore CEO Coveney sees full sales recovery taking 'one or two years'

Greencore boss Patrick Coveney has said it could take “a year or two” before sales volumes across its core food-to-go product lines fully recover.
Greencore CEO Coveney sees full sales recovery taking 'one or two years'

Greencore boss Patrick Coveney has said it could take “a year or two” before sales volumes across its core food-to-go product lines fully recover.

However, he said it is “too early” to suggest Greencore should be re-thinking its overall business strategy.

Since the end of March, the Irish convenience food producer has seen demand for its food-to-go output tank by up to 70%.

The majority of the group’s business falls into this category – which covers everything from office workers grabbing pre-packed sandwiches and salads for lunch, to people buying pre-made savoury food in coffee shop chains, motorway services stations and convenience stores.

Greencore generates the vast majority of its revenues from the UK, where it is the largest maker of pre-packed sandwiches. The group said the Covid-19 outbreak has had a “dramatic and volatile impact” on the shape of UK food consumption.

However, it has also noted some signs of the market stabilising. Speaking on the back of the group’s first half results for the six months to the end of March – which showed a 1.6% increase in revenues to £713m (€798m), but a 14% dive in operating profit to £35.6m – Mr Coveney said Greencore expects a “big step-on” in food-to-go sales in the coming weeks and months as more sections of the British economy return to work and that a recovery is already evident. Its more traditional lines – particularly cooking sauces – have seen sales jump since Covid restrictions were implemented.

Mr Coveney said it is “too early” to question whether Greencore needs to tweak or broaden its business model, saying that can be looked at once the business is back at full steam.

Greencore is still not offering earnings guidance for its current financial year. Analysts expect double digit percentage falls in earnings and revenue this year. Mr Coveney said it would be logical to suggest Greencore will be less profitable in the short-term, but said it has the time, resources and strong balance sheet to build profits back up and recover. He admitted, however, that the business has a big job to do.

Greencore has either suspended or lowered production at four manufacturing sites in the UK, but expects a partial reopening shortly.

Around Covid-19 Mr Coveney criticised the UK government for not being as clear on health policy as other countries, such as Ireland. However, he said that Britain had done a “very good job” in terms of economic, business and liquidity support measures.

Two months ago Greencore scrapped the interim dividend for its last financial year. It has now also done away with the full-year dividend payment and said it will not award an interim divided for its current financial year either.

more articles

Leo Varadkar still has ‘some’ texts from pandemic period Leo Varadkar still has ‘some’ texts from pandemic period
Taoiseach visit to the US Leo Varadkar still has ‘some’ texts from covid pandemic period
Nolan says lessons need to be learned from Covid inquiry Nolan says lessons need to be learned from Covid inquiry

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited