Ambient food manufacturer Greencore has made much progress in the year or so since its failed merger with Northern Foods, as is clear from its third quarter trading update. Judging by the share price, though, investors remain more focused on the group's recent troubles than its much improved prospects.
Despite the wet weather in June taking its toll on demand for the salads, sandwiches and quiches Greencore makes for major retailers, the food producer still still managed to increase underlying sales by 6.8 per cent. The Uniq business, acquired in September 2011, grew faster still, with underlying sales up 7.3 per cent, and Greencore said integration remains on track after the disposal of its deserts business in June.
Greencore is quietly building up a substantial presence in the US, too. After first entering the market four years ago it has recently upped investment there with the acquisitions of MarketFare in April and the purchase of Schau and Son at the end of June. Prior to the latest deal the US operation had been generating sales of around $160m, but chief executive Patrick Coveney told Investors Chronicle that he expected a material pick-up over the next three to five years as the group takes advantage of its extended geographic footprint. His attention will now turn to integrating the businesses there to improve profitability, but a major new contract award suggests it does have the scale to compete successfully in the less mature US chilled food industry.
