Strong results make for a successful Q3 for Greencore and Patrick Coveney.
The story of Greencore has always been one of reinvention, with the company rising from the privatisation of the old Irish Sugar Company in 1991 and, over time, leaving behind an industry that no longer exists in Ireland. Where once it dominated the sugar market in Ireland, now it is the leading player in pre-packed sandwiches in the UK.
That transformation has continued apace throughout the year, with a series of results announcements painting a healthy picture of the Santry-headquartered, London-listed company. The Q3 results are headlined by an 11.8% growth in pro-forma revenue, or 76.6% on a reported basis, to £636.5m.
Its Convenience Foods UK & Ireland unit reported growth for a quarter in which it also acquired a new sandwich manufacturing facility near Heathrow. “The strong growth momentum delivered in the period was driven by the Food to Go business, which accounted for more than 60% of divisional revenue in Q3,” the company announced.
“Reported revenue grew by 32.6% and pro forma revenue grew by 22.7% in the quarter. This performance was driven by positive underlying market growth as well as by the delivery of the previously announced business wins with several of the group’s largest customers. Operational disruption relating to the launch of these business wins has reduced in Q3.” There were “challenging” conditions in the ready meals, cakes and desserts markets.
Likewise, its Convenience Food US division saw 6.6% pro forma revenue growth, with the company’s acquisition of Illinois-headquartered Peacock Foods late last year beginning to pay off. “The integration of the US business is on track and the group is encouraged by the pipeline of commercial opportunities being explored with existing and new customers,” Greencore announced. “The group believes that these opportunities, as well as an improving customer mix, will help the US division to leverage its enlarged network footprint and wider capabilities in order to drive profitable growth in FY18 and beyond.”
At the helm since 2008 is CEO Patrick Coveney, who stepped up from the CFO’s office having previously served as managing partner at McKinsey in Ireland. Coveney, brother of Fine Gael minister Simon, is one of the highest-profile Irish executives around today, has served as president of the Dublin Chamber of Commerce for a year’s term, and is a non-executive director of Irish dairy giant Glanbia.
Last year he was also appointed non-executive chairman of Core Media, a new role within the Dublin advertising firm. Coveney took to the pages of Business & Finance to share his thoughts on the industry: “The lack of real belief, in many boardrooms, regarding the critical role of marketing to drive business growth is puzzling. This may have been excusable in the distant past, when measurement techniques were more intuitive and less reliable, but that is no longer the case.
“Since becoming involved in the advertising industry I have been impressed by many things, but I have been particularly taken by the ability now to empirically validate marketing and advertising effectiveness, primarily through econometric modelling. Much of this work is carried out by a new breed of marketers – data science professionals and teams that look radically different from the caricatures in Mad Men.”
Back at the day job – Greencore – Coveney leads a company with a headcount of 16,000 manufacturing 1.5bn sandwiches and food-to-go products on 31 sites in the UK, US and Ireland. Its year to date has also been marked by winning a series of industry awards: Own Label Supplier of the Year at the Grocer Gold Awards and Food To Go Manufacturer of the Year at the British Sandwich Awards, as well as a Private Label Manufacturers’ Salute to Excellence nomination.
Q4 is “the most seasonally important period for Greencore in both the UK and the US”, the company said as it announced its latest results, describing this as a “transformational” time for the company. But given its history, Greencore is a company in a permanent state of transformation.
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