Greencore, the Irish ingredients and food producer, is predicting a decline in its net debt for 2002 as its core operations continue to improve despite continued difficulties in its ambient grocery division. The company is predicting that it will end the year with net debt of €565 to €575 million, down from €874 million in March 2001.
Commenting on the period from April to August, the first few months of the current fiscal year, Greencore said that its ingredients division, which consists primarily of Irish Sugar and the Greencore Malting Group plus oatmeal, animal feeds and edible oils, had been trading in line with expectations, including a reduction in profits from Irish Sugar.
The company's chilled and frozen food division continued to trade strongly, however, with a 8 per cent rise in sales during the period despite poor weather in the early part of the summer. There was particularly strong performance in the sandwiches and chilled ready meals categories, both of which experienced growth of 16 per cent.
The transfer of production from a pizza plant in Bedford will now mean the closure of the site, but Greencore said that there was still much work to be done to improve the efficiency of its new plant on Deeside (north Wales) to which production was transferred.
The group's bakery business, Rathbones, continued to struggle, and Greencore said it was actively exploring all possible ways of improving its position in this market. A new cake and dessert factory at Hull (north east England) continued to underperform during the financial year, although volume growth of 7 per cent year-on-year has been achieved since April, the company said. However, the business is performing better in terms of cost management, and a number of new product launches planned for the coming year should see a return to strong profit growth in this unit.
Greencore added that trading in its agribusiness unit, which includes agrichemicals and health products as well as molasses and cereal businesses, had been satisfactory in the year to date.