£391m sliced from sarnie firm as US arm eats profit

YOU would hope Greencore’s sandwiches taste better than the enormous losses it has plated up for investors.

Greencore, the world’s biggest sandwich maker, issued a profit warning yesterday that wiped £391m off its value.

Its problems centre on its US business, which does not have the sales to match its ample production capacity.

The FTSE 250 firm, which makes 1.5bn sarnies a year, has announced a major restructure of the US business, including stopping production at its Rhode Island site. Other sites could be ‘repurposed’, it said.

Group chief executive Patrick Coveney will also spend half of his time across the pond from now on, taking a ‘direct role in the strategic, operational and leadership’ of the US business.

But analysts took Greencore’s attempts at reassurance, chewed them up and spat them out like an unwanted egg sandwich.

In an unusually strongly-worded note to investors, Peel Hunt said it had ‘thrown in the towel’ with Greencore as it downgraded it from ‘buy’ to ‘hold’.

It added: ‘Management credibility is clearly damaged and we do not have confidence regarding the scale, timing and impact of new business wins to have a positive recommendation.’ Ouch.

The announcement sent its shares tumbling by 30.3pc or 55.35p to 127.25p, wiping £391m off its value.

Chancellor Philip Hammond described himself as ‘Tigger-like’ as he gave a bullish update on the British economy.

But the FTSE 100, on the other hand, was anything but springy, huffing and puffing its way to a disappointing fall of 1.05pc or 75.98 points at 7138.78.

Record profits and sales certainly put the bounce into Zotefoams’s shares, though. The London-based company makes lightweight, durable foams for use in planes, cars, sports equipment and packaging. At the end of last year, it announced a deal to supply Nike with foam for use in its shoes. Last year it grew pre-tax profits by 22pc to a record £8.8m and revenue by 17pc to £70.2m, another record.

It has just broken ground on a foam manufacturing site in Croydon while its plant in Kentucky has just achieved its first sales. Another manufacturing hub is planned in the US next year. Shares shot up 7pc or 33p to 504p.

Bango’s payments software may be used by the likes of Amazon, Google, Samsung and Microsoft but it’s still struggling to make a profit. Despite increasing revenue by 62pc to £4.2m, the AIM-listed firm made a loss of £1.6m last year, although that is better than the £2.8m loss it made the year before. The company makes software that allows customers to buy apps, music and games on a smart phone or tablet, with the payment charged to the user’s phone bill.

As upbeat as you would expect the chief executive of a company called Bango to be, Ray Anderson says he is confident of ‘substantial’ revenue growth this year.

But shares plunged 10.2pc or 19.5p to 172p.

A major deal with a US biotechnology firm for Hemogenyx Pharmaceuticals pushed the lift-off button on its share price.

Hemogenyx will work with the unnamed firm to develop treatments for blood diseases, such as leukaemia, in a deal worth around $250,000 (£179,000).

They will test their treatments on terrifyingly named ‘humanised mice’. In essence, this means the mice have had their blood genetically altered to resemble that of humans. This is so researchers can be more certain their treatments will work on people.

Hemogenyx’s shares price ended the day up 8.9pc or 0.28p at 3.35p.