Greencore improves despite scandal

GREENCORE, the food group born out of the Irish sugar company, shrugged off its scandal- ridden recent past with a 24 per cent rise in pre-tax profits to Ir pounds 31m ( pounds 34m) for the year to 25 September.

But in its first full-year results since it was privatised by the Irish government, the group continued an Ir pounds 1.9m provision for potential legal costs arising from the scandal that overtook it last year.

Its former chief executive, Chris Comerford, resigned after claiming he was the beneficial owner of a stake in Greencore's main distribution company, which the group bought before privatisation. There have been two official inquiries into the affair.

Joe Gill, an analyst at Riada, the Dublin stockbrokers, said the new management had proved themselves capable of running the business and squeezing more operational efficiency from it.

He said the next test would be to find suitable acquisitions to broaden the group's base from protected products such as sugar and from Ireland. Gerry Murphy, chief executive, said the company had 'a few potential acquisitions under review'.

Greencore's debt grew from 23 per cent of shareholders' funds to 61 per cent because of the acquisition of Food Industries, and Mr Murphy acknowledged that Ireland's high interest rates would have an impact.

Mr Gill said the stock market rating was still affected by uncertainty over what the new Irish government would do with its remaining 25 per cent stake. The shares stuck on 255p, valuing the company at eight times earnings on Mr Clark's forecast of Ir pounds 32.5m profits next year.