Greencore, the Irish producer of convenience foods, has been hit by a ‘significant’ higher level of inflation in its cake and dessert business.
Revealing its results for the year ended 30 September 2011 it said the division had “experienced a difficult year” and this coupled with “excess industry capacity” had led to declining returns in its cake business.
But, it said: “Against this backdrop, the business delivered modest revenue growth in the year, improving distribution with several of our major retail partners.”
The company – which yesterday revealed it has ended takeover talks with a US-based private equity backer – saw its revenue increase by 8.7% to £804.2m, a rise of 4.3% on a like-for-like basis. However, group operating profit was £51.5m – in line with 2010, said the producer.
Patrick Coveney, Greencore’s chief executive, said: “2011 has seen Greencore complete its transformation into a focused and growing convenience food business. Our underlying business continues to trade well.
“The acquisitions that we made during the year in both the UK and US should be taken as a clear indication of our long-term strategy of supplementing organic growth with strategic corporate activity, and we are delighted with the way that the businesses are being quickly and efficiently integrated into the group. While the UK and US food markets remain challenging, we are confident of being able to drive further growth and shareholder value through our close customer relationships, strong operational performance and outstanding products.”
Greencore purchased Uniq in September.