Bottom Line: Greencore deserves smoother future

GREENCORE'S first-rate management team must have breathed a huge collective sigh of relief when its joint brokers, NatWest Markets and Dublin's NCB, placed Bank of Ireland's 11.4 per cent stake in the Irish foods group with US, UK and Continental institutions yesterday.

The price, 300p, was 25p more than the 275p at which J&E Davy, the Dublin stockbrokers, fouled up the placing of the Irish government's stake two months ago.

That debacle led to Bank of Ireland taking its stake and left Greencore with a fresh overhang in its shares.

Greencore has been dogged by controversy since its privatisation and flotation in 1992. But all the argy-bargy has had absolutely nothing to do with the new management or with the fundamentals of the business - these are perfectly sound.

A controversial past has left the company languishing on a prospective p/e of about 10, cheap enough by UK food sector standards, based on analysts' forecasts of pre- tax profits approaching pounds 34m this year.

The chief executive, Gerry Murphy, and finance director, Kevin O'Sullivan, both have impeccable credentials, having come respectively from Grand Met and Hillsdown.

They are anxious to move the business on and are joining in the march on UK and Continental markets being made successfully by other Irish food companies such as Avonmore, Waterford Foods and Kerry Group. Forget the bumpy past and buy cheaply into what should now be a smoother future.

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