Greencore boss Patrick Coveney is to split his time between the United Kingdom and the USA as the business announces a restructure of its U.S. operations and leadership. In its previous year, adjusted earnings per share was 15.40p, a 3.8% drop on its prior year.
In its trading statement today, Greencore said that fresh production at Rhode Island factory, which represented about 4% of its U.S. manufacturing footprint, will stop on March 25.
While the group plans to retain the plant for potential repurposing, chief financial officer Eoin Tonge told analysts on a conference call that it may have to write down the value of the $40 million asset, which would further dent earnings. This facility represents 4% of the firm's USA manufacturing footprint a year ago.
However, it is now restructuring its network as a result of continued low capacity utilisation.
Meanwhile at its Jacksonville site, the company said that it anticipates that new business wins will increase volumes and site utilisation in the latter half of this year.More news: Nike Inc (NKE) Shares Bought by DA Davidson & CO
In response to the underwhelming trading, Greencore is closing its Rhode Island facility due to its continued operating losses.
It added that it continued to make progress on its U.S. commercial pipeline, most particularly with its current large consumer packaged goods customers.
Looking ahead, the firm said it continues to expect good organic revenue growth, and that its core business in the U.S. has continued to perform in line with expectations. "Any incremental capital and cash costs related to the delivery of this new business are not expected to be significant for the group".
It added that it would incur £3m in one off cash costs "resetting the United States network" and management structure and may take a non-cash, asset impairment charge on full year results for the network restructuring.
Along with Patrick Coveney's increased involvement in the US - where he will now spend around half of his time - Chuck Metzger, COO of Greencore US, has assumed day-to-day responsibility for the US business and will report to Mr Coveney.
While Chris Kirke, outgoing CEO of Greencore US, is leaving the group to return to the UK.