Having plunged from an opening price of £2.28 to a near 5 year nadir of £1.20 by mid-March, Greencore shares managed to settle somewhat in early summer. Since then, the world’s largest sandwich manufacturer has been range-bound between £1.70 and £2.00, shifting towards the upper end of that band from September. Greencore shares now sit at a current trading price of £1.90.
The company’s most recent financial update came in late July, as it posted its third quarter results. There it revealed a 0.5% rise in reported Q3 group revenue to £639.6 million, with year-to-date revenue up 14% to £1.878 billion.
In the UK and Ireland growth was driven by the ‘Food to Go’ business, which saw a 10.7% jump in reported revenue.
Greencore US business
However, this wasn’t the biggest news the firm has offered in the last few months. After announcing it was restructuring its under-performing US business in March, mid-October saw Greencore reveal that just 2 years after expanding into America it was pulling out of the country entirely, selling the division to Hearthside Food Solutions for £817 million.
CEO Patrick Coveney claimed that the reason that the company opted to sell was ‘no more complex than we got what we saw as a knockout offer’. Just over £500 million of that will go to a special dividend for investors, with the rest used to reduce its debt pile from £500 million to £200 million.
This leaves its focus firmly on the UK, in which it already dominates, and will make Tuesday’s full year figures interesting reading.
Though investors will obviously want Greencore to post adjusted earnings per share at the upper end of its 14.7p to 15.7p target, they may be more concerned what its 2019 is shaping up to look like without the US division.
Greencore shares have a consensus rating of ‘Buy’ alongside an average target price of £2.11.
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