Greencore, the Irish headquartered food-to-go business, recorded a 74% decline in pre-tax profits to £12.4m for its 2017 financial year, as once-off charges hit the company’s bottom line.

Full-year results released this week show Greencore incurred restructuring costs and impairment charges of £78m in the 12-month period to the end of September.

The exceptional costs incurred by Greencore comprise a number of different items including a £30m impairment charge on software assets in its UK business, as well as a £25m charge relating to the acquisition and integration of the Peacock Foods business. The company also took a £16.5m charge after the closure of its desserts manufacturing site in Evercreech in the UK.

These combined charges saw operating profits in the business decline 43% to less than £43m, as profit margins narrowed 330 basis points to 1.8%. Excluding the exceptional charges, Greencore said adjusted operating profits increased by more than a third to £140m, with margins only slightly lower (-90 basis points) at 6% for the year.

Turnover increased by more than 56% to £2.3bn as a result of the Peacock acquisition. The company has recommended a final dividend payout to shareholders of 3.37p per share, which will bring the total shareholder dividend for the year to 5.47p per share.

Greencore chief executive Patrick Coveney said the business had been significantly reshaped over the last year. “While we have delivered good financial and operating progress in the year, the transformation has not been without its challenges,” he added.

By division

UK and Ireland convenience foods

Greencore’s business in the UK and Ireland saw revenues rise 14% to more than £1.4bn. Adjusted operating profits were up 3% to almost £107m, despite margins tightening by 90 basis points to 7.4%. Greencore said it secured some key contract wins. It also extended a number of contracts with existing customers so it now has multi-year supply contracts with all core customers. The company said it has a 60% share of the UK sandwich market in the grocery channel.

US convenience foods

In the US, Greencore’s business was significantly expanded following the acquisition of Peacock Foods last November. On an underlying basis, turnover for the US convenience foods business increased 6% to just over £881m.

Operating profits in the business stood at £33m, giving the business a profit margin of 3.8%. Greencore said the division achieved sales volume growth of 7% in the period with increases in the sales volume of lunch kits (+5%), frozen breakfast sandwiches (+2%), fresh sandwiches (+9%) and salad kits (+13%).