Patrick Coveney, the chief executive of convenience foods group Greencore, is to spend ‘approximately half his time’ in the US, as part of a shakeup of the company’s leadership team.
Coveney is to take a ‘direct role in the strategic, organisational and commercial leadership of Greencore US’ as part of his new role, with Chuck Metzger, COO of Greencore US assuming day-to-day responsibility for the US business.
Elsewhere, Chris Kirke, outgoing CEO of Greencore US is leading the Group to return to the UK.
The shakeup comes just over a year on from the acquisition of Peacock Foods in December 2016, which ‘greatly enhanced the scale, operational capabilities and financial performance of Greencore US’, the company said in a statement.
In January, Greencore revealed that pro forma growth at its US Convenience Foods operation in Q1 was 5.1%, with the business posting sales of £255.1 million.
Its Q1 group sales were 7.2% up on last year, at £640.5 million.
Low Capacity Utilisation
In addition, the group recently reported low capacity utilisation at some of its US sites, and is ‘restructuring its US network to reflect the commercial pipeline and to address these utilisation challenges’.
With this in mind, fresh production at the group’s Rhode Island facility is to cease from 25 March, while it announced plans to repurpose its Jacksonville facility following the loss of a supply contract - believed to be that of Starbucks - last August.
In Minneapolis, the business has ‘delivered several pieces of new business to the site’ in order to boost capacity utilisation, particularly following the Peacock Foods acquisition.
‘Greencore continues to make progress on its US commercial pipeline, most particularly with its current large Consumer Packaged Goods customers,’ the company said in a statement.
‘Plans are well advanced which, if successful, would secure significant new business at several sites in the Midwest region. The Group anticipates that such new business would contribute revenue and earnings from the first half of FY19.
'The timing of these wins represents a delay versus previous expectations.’
2018 Outlook
Looking ahead to the coming financial year, the group said that it ‘continues to anticipate good organic revenue growth and a modest improvement in operating leverage’, despite softer volume growth in the second quarter, due to poor weather.
It it anticipating an impairment charge of around £3 million to its full year income statement, as a result of the planned network restructuring.
It also anticipates adjusted EPS for the year in the range of 14.7p-15.7p, with approximately two thirds of that contribution delivered in the second half.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
