Lack of vi­sion jibe stings Green­core

The Irish Times - Business - - BUSINESS NEWS -

The most pointed crit­i­cism di­rected at Green­core’s board at Wed­nes­day’s ex­tra­or­di­nary general meet­ing to sanc­tion the sale of its US busi­ness was that it lacked a strat­egy.

Sev­eral in­vestors com­plained about the tax im­pli­ca­tions of the com­pany’s pro­posed £509 mil­lion div­i­dend to share­hold­ers, worth 72p per share, em­a­nat­ing from the sale.

But the board looked most dis­com­fited by the sug­ges­tion that its move to un­load much of the pro­ceeds in the form of a div­i­dend amounted to a lack of vi­sion of where to go next. For chief ex­ec­u­tive Pa­trick Coveney, nor­mally so bullish on the com­pany’s prospects, this must have stung.

Green­core’s sur­prise move to exit the US mar­ket after 10 years of talk­ing up its busi­ness state­side, and barely two years after its high-pro­file ac­qui­si­tion of Illi­nois-based Pea­cock Foods, has taken in­vestors by sur­prise. It also amounts to a dou­bling down on the Brexit-be­witched UK mar­ket, which now ac­counts for 100 per cent of its cus­tomer base.

Coveney is not used to be­ing on the back foot like this, hav­ing presided over a pe­riod of rapid ex­pan­sion in the busi­ness. Asked if the com­pany might look at some­thing out­side of the UK, given the Brexit un­cer­tainty, he said: “I don’t think we’ll look at any­thing out­side of the UK.”

He also seemed to rule out ex­pand­ing the busi­ness through ac­qui­si­tions in the near term at least. “Clearly what we’re not go­ing to do is to be bounced into do­ing things by virtue of the fact that we have more re­sources.”

Un­doubt­edly the com­pany’s prob­lems in the US, which trig­gered a profit warn­ing in March, its first in 10 years, and a sub­se­quent slump in its shares, has tem­pered am­bi­tions some­what and prompted a cer­tain de­gree of soul-search­ing.

Coveney said, how­ever, Green­core had learned les­sons from Pea­cock on how to drive a busi­ness more ef­fi­ciently. Per­haps ap­ply­ing these les­sons to its suc­cess­ful UK busi­ness is the best strat­egy for now.

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.