Covid-19 leaves bad taste at Greencore as firm seeks £90m to shore up against virus costs
Food producer Greencore is targeting a £90m equity placing to mitigate the cost of Covid-19 to the business, after the group’s pre-tax profits stood at £17.3m – down 81 per cent on 2019.
Directors and members of the senior management team are expected to contribute a combined £700,000 to the £90m the group is seeking.
Coronavirus hit the UK’s biggest sandwich maker hard. The business incurred Covid-19 related costs of £24.6m, comprising £10.7m of operating costs and £13.9m of exceptional charges.
Actions taken during 2020 to protect profitability included rapidly tightening the group’s food to go network to adjust to demand changes, furloughing a substantial proportion of colleagues using the coronavirus Job Retention Scheme, reducing agency labour, deferring product development, pay freezes, and agreeing voluntary reductions in compensation for the Board and the wider senior management team.
Greencore CEO Patrick Coveney described 2020 as “an exceptionally challenging year for Greencore”.
“There is a direct correlation between the performance of food to go and the nation’s ability to move around freely,” he said. “As a result, that part of our business has been significantly impacted by the social restrictions that have been put in place as a result of Covid-19.
“However, we remain confident that demand for our food to go categories will recover strongly as the effect of Covid-19 recedes, and were encouraged by the uplift in demand that we saw in Q4 as the UK economy slowly reopened.”