Interim Results

RNS Number : 3570V

Greencore Group PLC

28 May 2008

 



Greencore Group plc

Half yearly Financial Report 2008

Interim Management Report

for the half year ended 28 March 2008

Greencore Group plc, a leading international convenience food and malt producer, today announces a good performance for the half year ended 28 March 2008 and good prospects for the remainder of the year.

Highlights

• Group sales up 2.5% to €648.7m and by 10.4% on a constant currency basis

• Group operating profit1 up 2.5% to €41.1m and by 11.8% on a constant currency basis

• Adjusted EPS2 up 7.4% to 13.0 cent

• Solid underlying momentum in Convenience Foods Division

  • Strong performance in recovering input price inflation

  • Increase in core sales3 by 6.5%

  • Constant currency operating profit1 decreased by 3.8%

• Very strong Malt performance driving Ingredients & Related Property division

  • 61% increase in continuing operating profit

  • 27% increase in sales

• Significant momentum on the convenience foods development agenda with three acquisitions in the financial year to date

• Net exceptional gain of €18.1m contributing to a 36% increase in profit for financial period

• 30% reduction in comparable net debt year on year to €275.4m

• 5% increase in interim dividend to 5.30 cent per share

1    Before exceptional items and acquisition related amortisation.

2    Before exceptional items, acquisition related amortisation, FX on inter-company and certain external loan balances and the movement in the fair value of all derivative financial instruments and related debt adjustments.

3    At constant exchange rates and excluding factored sales from the comparative period.

COMMENTING ON THE RESULTS, GROUP CHIEF EXECUTIVE PATRICK COVENEY SAID:

'These results represent very good progress in an environment characterised by substantial food inflation and a significant decline in the value of sterling relative to the euro. On a constant currency basis, we delivered strong double digit growth in sales, profit and EPS. This performance reflects a portfolio that is working, strong customer relationships across Convenience Foods and Malt, excellent cost control and good inflation recovery. Furthermore, we acquired Ministry of Cake and Danone Flavoured Water, both in the UK, in December and Home Made Brand Foods, in the USA, in April. These acquisitions are bang in line with our strategy of extending our category leading businesses in the UK and entering the US chilled food market in the right way.'

FOR FURTHER INFORMATION, PLEASE CONTACT:

Patrick Coveney	Chief Executive Officer	Tel:	[phone]
Geoff Doherty	Chief Financial Officer	Tel:	[phone]
Eoin Tonge	Capital Markets Director	Tel:	[phone]
Billy Murphy/Anne Marie Curran	Drury Communications	Tel:	[phone]
Marie Cairney/Elizabeth Rous	Powerscourt	Tel:	[phone]

ABOUT GREENCORE

	A leading international producer of convenience food, as well as an established ingredients supplier with operations in Ireland, the UK, the US, The Netherlands and Belgium
	Strong market leadership positions in the UK convenience food market across sandwiches, chilled prepared meals, chilled soups and sauces, ambient sauces & pickles, cakes & desserts, mineral water and Yorkshire puddings
	Extending presence outside the UK with fast-growing convenience food businesses in the US, The Netherlands and Ireland
	The leading malt producer in Ireland, the UK and Belgium
	Significant property assets in Ireland and the UK

Summary

Overall

Greencore has delivered a solid overall performance in a testing environment in the first half of FY08 with adjusted EPS up 7.4% to 13.0 cent. The Group made significant progress in each part of its business most notably substantial recovery of input price inflation; laying the foundations for geographic expansion in Convenience Foods; achieving good traction on the development agenda and delivering a very strong malt performance. Group operating profit and sales on a constant currency basis increased by 11.8% and 10.4% respectively on the comparative period with a strong Ingredients & Related Property performance, in particular Malt, more than offsetting a modest decline in Convenience Foods.

Convenience Foods

The Convenience Foods division, which accounted for 68% of Group operating profit in the first half of FY08, performed solidly in tough conditions. Operating profit, on a constant currency basis, decreased by 3.8% (a decrease of 12.5% to €27.9m after the impact of currency translation). This headline masks a positive underlying performance with good delivery on confronting the inflation experienced by the global food industry in the period. The operating margin decreased by 50 bps from 6.7% in the first half of FY07 to 6.2% in the first half of FY08. The key driver of this was margin attrition in our ambient cooking sauces and pickles ('Grocery') business in the period, reflecting a particularly challenging input price inflation environment, which had a more pronounced impact on its supply chain than in chilled categories.

The achievement of price increases was prioritised over volume growth in the period. Actual sales were €451.2m compared to €477.8m last year, a decrease of 5.6%. On a constant currency basis sales increased by 3.4%. The comparative period benefited from non-manufactured distribution volumes and in March 2007 (following Starbucks trade loss) we took a strategic decision not to perform pure distribution business in isolation. When this €14.1m of 'factored' or distribution sales are eliminated, from the first half of last year, core sales growth was 6.5% on a constant currency basis in the first half of FY08.

The first half of the year has also continued to see significant momentum in the development agenda in convenience foods through both organic and acquisition activity.

Ingredients & Related Property

The Ingredients & Related Property division recorded a very strong performance. Operating profit, on a constant currency basis, increased by 72.4% (representing an increase of 61.0% to €13.2m after the impact of currency translation). Total sales were €197.4m in the period representing a 31.9% increase on a constant currency basis (27.5% increase after the impact of currency translation). The improvement seen in global malt markets in 2007 has continued in 2008 with a much tighter supply/demand balance than has been seen in recent times. Brewers and Distillers are increasingly moving some of their requirements to long-term agreements, which provide some opportunity to secure a portion of future profitability. In addition, the Group's property team has continued to make progress in adding value to our significant property assets, albeit in a weaker property market.

Finance and Treasury

The Group’s net finance charge⁴ of €9.6m increased by 6.6% during the period reflecting, in the main, a reduction in the net pension credit by €0.6m. The Group’s net debt position has improved with comparable net debt at 28 March 2008 totalling €275.4m representing a reduction of €117.6m, or 30%, on the same period last year. Cash generated from operations was €2.1m compared to €40.8m in the first half of FY07. A working capital outflow of €52.2m was recorded in the first half of FY08 compared to an outflow of €13.6m in the first half of FY07. Approximately €33.0m of the outflow is due to normal seasonal outflows in our Ingredients businesses, which will largely unwind by year-end, being significantly impacted by price and volume increases. Sales in this division increased by 31.9% on a constant currency basis over the first half of FY07.

The Board of Directors is recommending that the interim dividend be increased by 5% on the prior year to 5.30 cent per share (2007: 5.05 cent).

4    Excluding FX on inter-company and certain external loan balances and the movement in the fair value of all derivative financial instruments and related debt adjustments.

Outlook

The Group is well placed to deliver a good performance in the seasonally more significant second half of its financial year.

In Convenience Foods, from a trading perspective, the key sensitivities are consumer sentiment, ongoing input price inflation and weather. Whilst in the financial year to date we are seeing more volatility in month-on-month sales patterns, overall sales are holding up well and we expect the underlying sales performance seen in the first half to carry through to the second half. We continue to manage input price inflation through aggressive management of our cost base and our price increase agenda. On the issue of weather, our expectations are based on more 'normal' summer conditions than those seen last year. Overall, after taking account of the issues referred to above, we expect a good second half and modest profit growth in the division (albeit at a level below existing market expectations) on a constant currency basis for the full year.

In Ingredients & Related Property, we expect to see a continuation of the good performance seen in the first half. Our Malt business remains very well positioned to deliver a good profit performance in the year. We will continue to build on the progress made to date on reducing and eliminating zoning and planning risk to best position our Related Property portfolio in anticipation of a return to more favourable property market conditions.

Currency translation has impacted our results in the first half and given current levels of EUR/GBP we expect this to be more pronounced in the second half. Approximately 80% of total operating profit is expected to be delivered in sterling (with revenues and costs similarly denominated) and the change in the EUR/GBP exchange rate seen in the year to date will impact on the year on year translation of our results. If the EUR/GBP level continues in the 0.78-0.80 range, the translation effect year on year would reduce Group operating profit by c. €11.0m and profit before tax by c. €8.5m for the full financial year.

The Group remains well placed in the current year and beyond to take advantage of our strong category market positions, our well-invested facilities, our reputation for 'true' food innovation and our growing geographic footprint. 

Review of Operations

Convenience Foods

The Convenience Food division represents the 'engine' of the Group and comprised 68% of Group operating profit in the first half of FY08. The division performed solidly in the period in a particularly demanding environment with relentless input price inflation. The quality of our market positions, which we have spoken much of in recent years, was demonstrated in a very tangible way in the period under review. Highlights for the period include:

• Recovery of raw material price inflation

In FY08, an estimated €57m of cost of goods price inflation will be experienced by our Convenience Foods business. Of this c. €22m impacted the first half. Recovery of this is centre stage on our commercial agenda. As a result, all businesses with the exception of our ambient Grocery business maintained underlying margins. Our Grocery business was significantly impacted with its supply chain experiencing higher levels of inflation in areas such as glass, processed tomatoes and onions. Primarily, as a result of this impact on our Grocery business, the overall operating margin in the first half of FY08 decreased to 6.2% from 6.7% in the first half of FY07.

• TLC - the 'right' platform in the current environment

Our 'Total Lowest Cost' culture and support programmes has set our business apart from our competitors in recent years. It represents a distinctive approach where inefficiency is chased out of the business. The model is not based on 'cheapness' but is much more about a culture of efficiency which permeates our organisation and people. In an environment of high inflation we continue to look to our own cost base first and to our customers second. We do not look for 'unchallenged' price increases and seek them only to maintain acceptable returns on capital. There are in excess of 300 separate initiatives underway across the Group currently. In the first half of FY08 c. 2% of sales was generated in savings resulting from TLC initiatives with an expected annualised benefit in FY08 of c. €17m.

• 'Top-drawer' private label food players

Our customers value us, in particular, for our private label category management skill, innovation and technical excellence. They trust us with 'their' brands. Our job is to lead category innovation for our customers so that they ultimately can be successful with consumers. Examples of this private label innovation in the period are the 'King Prawn Nori Wrap' for Sainsbury, the Tesco 'Light Choice Crustless Quiche' (launched in January), ASDA's 'Good for You Soft Cheese, Ham and Caramelised Onion Plait' and our range of Cocktail Gherkins for M&S (launched in December 2007). We can successfully marry through new and existing product development our customers need for true food innovation and our need to make acceptable returns on capital.

• Stretching our geography

A key pillar of our strategy is to grow our international operations. We believe we can leverage the expertise from our market leading positions in the UK to take advantage of consumer needs in other geographies. Our acquisition of Home Made Brand Foods Inc. ('HMBF') is an exciting step for us. This business, located in a well-invested chilled facility near Boston, has an excellent management team, a strong record of innovation with its customers and a customer base who want chilled food. Additionally, our Continental European business is having a strong year driven by a positive sandwich and meals solutions performance. We have launched a new 'Bakerstreet' range of sandwiches and rolls and our 'Kies en Kook' (pick 'n' mix) range of sauces at Albert Heijn is performing well. We are also making good progress in Ireland supplying meal, quiche and ambient cake products to leading Irish retailers from our UK facilities. In aggregate, the non-UK portion of our sales has current annualised sales run rate of approximately €100m (including HMBF) and we have more than doubled our sales on the Continent and in Ireland over those recorded in the first half of FY07.

• Cost advantage through scale, well-invested facilities

The bedrock of our business is the quality of our manufacturing facilities. The Group has c. €300m invested in state of the art production competence and equipment. In an era of ever increasing focus on efficiency and costs our facilities are a source of competitive advantage to us. Manton Wood, our 160,000 square foot sandwich facility is the largest such facility internationally, our Cakes and Desserts facility in Hull, with three production zones is unrivalled in the category and our Ambient Grocery facility in Selby is the largest cooking sauce facility in Europe. Category and factory scale matters in food and delivers a lower cost per unit advantage for our customers and consumers. This scale also helps 'pay' for the innovation, which helps underpin our No.1 and No.2 category market positions. In the first half of FY08, we invested a further €16.6m on enhancing our Convenience food facilities. The investments included a significant upgrade of our Sushi facility and the commissioning of new chilled meal lines at our Warrington and Wisbech facilities.

• Health, Well-being and the Environment

The consumer is increasingly conscious of health and the importance of food in achieving a better lifestyle. Throughout 2008, we have continued to strive to achieve a healthier product portfolio. An example of this is that we have continued to develop and further increase the quantity of our product lines which meet the UK Food Safety Authority (FSA) salt target (84% of our product ranges comply with the 2010 FSA target ahead of schedule). Additionally, we invest in nutrition with a dedicated nutrition team working with our customers to provide more information about the food we produce thus empowering consumers to make healthier choices. We are particularly proud of our partnership with WeightWatchers® which delivers a healthier range of meal solutions to the consumer. Annual sales are now running at €41m increasing 91% year on year with new categories of sandwiches, wraps & salads, quiche, cooking sauces and mayonnaise added in the period.

• Business and portfolio risk - how we think about it

A balanced set of customer relationships - our core retail customers in the UK market remain at the heart of what we do. Geographic diversification - we have grown our business beyond the UK and over the next five to ten years we would like to achieve a 50/50 Europe/International split of our business. Channel diversification - 32% of convenience food sales are now delivered from Foodservice and Convenience store outlets. Examples of new trade in the period include Deep Filled Apple Pie business with Burger King and Steak Fanatic Sauce for Domino's Pizza.

• Value-add through acquisition

In FY08 to date we have made three acquisitions, including HMBF after the period end. We are selective acquirers and only acquire where we can tangibly add value to the acquired business. Our 'value-add' criteria are based on:

• Acquiring 'on strategy' people and competencies which we do not currently have;

• An opportunity existing for Greencore to leverage its people and competencies (e.g. through sales growth, synergies or process improvement);

• Building on, or getting us to, the No.1 or No.2 category market position we aspire to;

• Businesses which are available at valuations which make sense.

Our acquisition of Ministry of Cake in December 2007, a leading foodservice provider of desserts solutions opened up our access to this channel and provides an opportunity for us to leverage an innovative and winning team into other foodservice categories. Our acquisition of a former Danone water business at Blaen Twyni in December 2007 will provide valuable capacity to help underpin our No.1 market position in private label water. The acquisition of HMBF marked the Group's entry into the growing chilled convenience food market in the US. Based in Newburyport, Massachusetts, HMBF is a regional leader in fresh prepared food. It manufactures and supplies a range of fresh food products, including fresh prepared meals and salads, sandwiches and quiche to a customer base that includes leading regional retailers such as Stop & Shop, Hannaford and Publix.

Ingredients & Related Property

Continuing on the progress made in FY07 the Ingredients & Related Property division recorded a strong first half performance. Operating profit, on a constant currency basis, increased by 72.4% representing an increase of 61.0% to €13.2m after the impact of currency translation. Sales were up 31.9% on a constant currency basis (by 27.5% after the impact of currency translation). The key driver of the divisional performance was Malt, which comprises c. 60% of divisional sales. Progress continues to be made on the Group's property agenda with each of the key sites making headway on the zoning and planning processes.

• Continued momentum in Malt

The recovery seen in 2007 has continued through to 2008 with an improvement in overall sales and malting margins. Returns on capital are now at more acceptable levels. A much closer alignment of global supply and demand has continued to underpin malt margins. Because of the relatively extended time frame for construction of new malting capacity current indications are that the 'tightness' of supply and demand should extend into 2009. Our business remains well placed to take advantage of this, in particular, as a result of the restructuring efforts undertaken in 2005 and 2006. Additionally, we are seeing some crossover between our competences and processes in Convenience Foods and Malt. In particular 'food' safety is becoming increasingly important for our brewing and distilling customers and there is some opportunity to add value for our customers in this area. Critical Group processes such as TLC are firmly embedded in Malt which positions us well to capitalise fully on stronger markets.

• Further zoning progress in Related Property

We continue to make progress in addressing zoning and planning risk across our four key sites. Carlow County Council has adopted a Draft Local Area Plan, which is expected to be adopted in final form in the next two months. This proposes a significant mixed use re-zoning of the Carlow aspects (220 acres) of 'Carlow Gateway'. Efforts are underway to re-zone the Laois aspects (113 acres) with better visibility on this expected by year-end. In Mallow, our 'Mallow West' Masterplan is currently under consideration by Cork County Council. We had expected a decision on this prior to half-year end but the process is not the subject of a formal statutory timetable. We do, however, expect an outcome by the end of FY08. Preparatory work has now commenced on our planning application for c. 1,500 residential units on our consortium lands at Littlehampton (Greencore owns 68% of the land) with a planning application targeted by the end of the 2008 calendar year. Allowing for the various milestones in the planning process, a planning and re-zoning decision is expected by the end of 2010. Two separate planning applications, covering 20 acres out of a total of 40, have been made in respect of our Athy lands. These are currently under consideration by Kildare County Council. Property markets have softened considerably in recent times. Our Property business is, however, well placed to deal with these conditions as our entry costs are low and ongoing investment in planning and zoning in the near term will be modest. We will continue to target zoning and planning gains to best position our Related Property portfolio in anticipation of a return to more favourable property market conditions in due course.

• Resolution of EU Sugar restructuring aid

In January 2008 the Irish Government informed the Group of its decision to allocate 87.3% (representing a total of €127.0m) of EU restructuring aid to Greencore. This followed the Group's successful legal challenge of the Government's original allocation decision of July 2006. The revised allocation resulted in a final settlement of €83.4m received on 29 February 2008. The Group recorded a net exceptional gain of €18.1m in the period reflecting, primarily, the increased amount of EU restructuring aid received. We continue to make good progress in the delivery of our restructuring plan, the costs of which have already been provided for in 2007.

Financial Review

• Overview

In headline terms the strengthening of the euro against sterling has had a significant translation impact on the results when compared to the same period last year. The average EUR/GBP exchange rate was 0.67 in the first half of FY07 compared to 0.74 in the first half of FY08, impacting translation of our sterling results negatively by 10.1% in the period. Approximately 80% of total operating profits are sterling dominated. Actual operating profit¹ in the half year of €41.1m was 2.5% ahead of last year after the impact of currency translation. On a constant currency basis, operating profit was 11.8% ahead. Group sales of €648.7m were 2.5% ahead of last year’s €632.7m and were 10.4% ahead on a constant currency basis. Profit before tax² was €32.2m, 3.2% ahead of last year’s amount of €31.3m.

• Financing

The Group's net finance charge in the first half of FY08 was €11.7m (€5.4m in the first half of FY07). The change in the fair value of derivatives, related debt adjustments and FX movements on inter-company and certain external loan balances was a cost of €2.0m in the period compared to a gain of €3.6m in the first half of FY07, reflecting capital market volatility. Excluding this, the net finance charge was modestly higher than last year, increasing by €0.6m. The net increase of €0.6m primarily reflects an increase in bank interest by €0.2m, a reduction in the net pension financing credit by €0.6m and an increase in the unwind of the discount to present value of the EU receivable by €0.3m. Underlying bank interest costs increased reflecting both higher average working capital levels, with malt stocks in particular, increasing because of year on year increases in pricing and higher levels of Euribor and Libor.

• Taxation

The Group's effective tax rate in first half of FY08 was 17% (first half of FY07 22.5%) with the reduction of the overall % charge reflecting a change in the mix of the Group's profits and a reduction in the UK corporation tax rate from 30% to 28%.

• Earnings per share

Adjusted EPS² for the first half of FY08 was 7.4% ahead at 13.0 cent compared to 12.1 cent in the first half of FY07. On a constant currency basis, adjusted EPS was 16.5% ahead of last year. This is based on a weighted average number of ordinary shares of 199.8m in the period (first half of FY07: 198.6m).

• Exceptional items

In the period under review, the Group made an exceptional gain (net of tax) of €18.1m reflecting the higher amount of EU aid received, than the amount accrued, by €16.9m and €1.2m from the reversal of a write down and impairment of assets.

• Cash flow and net debt

Comparable net debt (excluding the impact of marking to market all derivative financial instruments and related debt) at 28 March 2008 was €275.4m, a year on year reduction of 29.9% from last year's €393.0m. During the period, the final instalment of EU restructuring aid, €83.4m, was received. Cash inflow from operating activities of €2.1m was recorded compared to an inflow of €40.8m in the first half of FY07. The Group seasonally increases working capital in the first half particularly in its Ingredients business. A working capital outflow of €52.2m (first half of FY07 outflow €13.6m) was recorded in the first half of FY08 reflecting, in the main, the impact of higher prices and volumes on ingredient working capital levels. This will largely unwind by year-end. In addition, €8.2m of invoice financing drawings were repaid during the first half of FY08 leaving a net amount outstanding at the period end of €15.4m. The first half of FY07 cash flows benefited by €12.2m in respect of the terminal working capital release in Sugar. Net capital expenditure of €20.8m was incurred as we continue to invest in our convenience food and malt facilities.

• Acquisitions

The Group made two acquisitions during the period for an aggregate consideration of €19.6m including debt acquired. Further amounts of up to c. €3.0m may become payable in, or following, FY09 depending on performance. The acquisitions were Ministry of Cake, the leading UK foodservice desserts player and the former Danone bottled water business at Blaen Twyni in Wales. Following the period end, the Group acquired a US business, Home Made Brand Foods Inc., for an initial consideration of €28m. Further amounts of up to €6.4m may become payable in FY09 depending on performance.

• Dividends

A dividend of 5.30 cent per share is proposed representing a 5% increase on the first half of FY07. Dividend cover remains c. 2.5 times on a full year basis.

• Employee Benefits

The fair value of total plan assets relating to the Group's defined benefit pension schemes (excluding associates) decreased to €452.4m at March 2008 from €547.3m at September 2007. The present value of total pension liabilities for these schemes decreased to €489.7m from €573.1m over the same period. This is reflected in an increase in the net pension deficit (before related deferred tax) to €37.3m at March 2008 (from a net pension deficit of €25.8m at September 2007).

• Total Equity

Total equity at 28 March 2008 was €278.5m a 31% increase on the €212.6m amount at 30 March 2007. Total equity decreased by €4.5m, or 1.6%, on the amount of €283.0m at 28 September 2007 due primarily to retained profit in the period of €42.9m being offset by currency translation differences of €6.0m (reflecting the depreciation of sterling against the euro), losses on cash flow hedges taken to equity of €2.7m and an actuarial loss of €25.0m on the Group's defined benefit pension schemes.

• Principal Risks and Uncertainties

Under the Transparency (Directive 2004/109/EC) Regulations 2007, the Group is required to give a description of the principal risks and uncertainties it faces. As with any large group, Greencore faces a number of risks and uncertainties. Individual business unit management teams primarily drive the process by which individual risks and uncertainties are identified, these teams being best placed to identify significant and emerging risks and uncertainties in their businesses. The key risks facing the business include the following:

• The loss of a significant manufacturing/operational site through fire, natural catastrophe, act of vandalism or critical plant failure could potentially have a material impact on the Group.

• Our cost base can be affected by fluctuating raw material and energy prices.

• The Group benefits from close commercial relationships with a number of key customers. The loss of any of these key customers, or a significant worsening in commercial terms, could result in a material impact on the Group's results.

• As a producer of convenience foods, Greencore is subject to general market related risks, including product contamination and general food scares.

• In common with the food industry manufacturers, unforeseen changes in food consumption patterns or changes in government legislation regarding the composition of food products may impact the Group.

• Financial risks associated with interest rate, foreign currency, liquidity and credit risk.

• The Group's defined benefit pension schemes are exposed to the risk of changes in interest rates and the market value of investments, as well as inflation and increasing longevity of scheme members.

• A significant IT system failure could adversely impact on operations.

• The value of the Group's property assets is subject to the macro-economic environment in Ireland and the UK, the successful environmental clean up of the Brownfield sugar factory sites and the nature and timing of any zoning and subsequent planning permission.

• Related Party Transactions

There were no related party transactions in the half year that have materially affected the financial position or performance of the Group in the period. In addition, there were no changes in related party transactions from the last annual report that could have had a material effect on the financial position or performance of the Group in the first six months.

• Auditor Review

This half yearly financial report has not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.

• Forward-Looking Statements

Certain statements made in these interim results are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from the expected future events or results referred to in these forward-looking statements.

E.F. Sullivan

Chairman

28 May 2008

Responsibility Statement

The Directors are responsible for preparing the Half Yearly Financial Report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the related Transparency Rules of the Irish Financial Services Regulatory Authority and with IAS 34, Interim Financial Reporting as adopted by the European Union.

The Directors confirm that, to the best of their knowledge:

• the Group Condensed Financial Statements for the half year ended 28 March 2008 have been prepared in accordance with the international accounting standard applicable to interim financial reporting adopted pursuant to the procedure provided for under Article 6 of the Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002;

• the Interim Management Report includes a fair review of the important events that have occurred during the first six months of the financial year, and their impact on the Group Condensed Financial Statements for the half year ended 28 March 2008, and a description of the principal risks and uncertainties for the remaining six months;

• the Interim Management Report includes a fair review of related party transactions that have occurred during the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period, and any changes in the related parties' transactions described in the last Annual Report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year.

	P.F. Coveney	G.P. Doherty
	Chief Executive Officer   28 May 2008	Chief Financial Officer

  Group Condensed Income Statement

for the half year ended 28 March 2008

			Half year ended 28 March 2008 (Unaudited)			Half year ended 30 March 2007 (Unaudited)			Year ended 28 September 2007 (Audited)
	Note		Pre- except-ional €'000	Except-ional €'000	Total €'000	Pre- except-ional €'000	Except-ional €'000	Total €'000	Pre- except-ional €'000	Except-ional €'000	Total €'000
Continuing operations
Revenue		3	648,655	-	648,655	632,711	-	632,711	1,267,156	-	1,267,156
Cost of sales			(472,803)	-	(472,803)	(456,653)	-	(456,653)	(903,296)	-	(903,296)
Gross profit			175,852	-	175,852	176,058	-	176,058	363,860	-	363,860
Operating costs, net			(134,977)	-	(134,977)	(136,012)	-	(136,012)	(272,819)	(5,923)	(278,742)
Group operating profit/(loss)		3	40,875	-	40,875	40,046	-	40,046	91,041	(5,923)	85,118
Finance income		12	22,915	-	22,915	21,227	-	21,227	43,645	-	43,645
Finance costs		12	(34,580)	-	(34,580)	(26,672)	-	(26,672)	(60,343)	-	(60,343)
Share of profit of associates after tax			825	-	825	252	-	252	733	-	733
Profit/(loss) before taxation			30,035	-	30,035	34,853	-	34,853	75,076	(5,923)	69,153
Taxation		6	(5,295)	-	(5,295)	(6,976)	-	(6,976)	(13,131)	1,658	(11,473)
Profit/(loss) from continuing operations			24,740	-	24,740	27,877	-	27,877	61,945	(4,265)	57,680
Profit from discontinued operations		5	-	18,128	18,128	571	3,064	3,635	1,628	52,455	54,083
Profit for the financial period			24,740 ________	18,128 ________	42,868 ________	28,448 ________	3,064 ________	31,512 _________	63,573 ________	48,190 _________	111,763 _________
Attributable to:
Equity shareholders			23,670	18,128	41,798	27,571	3,064	30,635	62,200	48,190	110,390
Minority interests			1,070	-	1,070	877	-	877	1,373	-	1,373
			24,740 ________	18,128 ________	42,868 ________	28,448 ________	3,064 ________	31,512 _________	63,573 ________	48,190 ________	111,763 ________

Note

Basic earnings per share (cent)

Continuing operations		11.8			13.6			28.3
Discontinued operations		9.1			1.8			27.2
	8	20.9			15.4			55.5

Diluted earnings per share (cent)

Continuing operations		11.8			13.6			28.2
Discontinued operations		9.0			1.8			27.1
	8	20.8			15.4			55.3

  Group Condensed Balance Sheet

as at 28 March 2008

	Note	28 March 2008 (Unaudited) €'000	30 March 2007 (Unaudited) €'000	28 September 2007  (Audited) €'000
ASSETS
Non-current assets
Intangible assets	9	368,593	355,543	357,229
Property, plant and equipment	9	362,046	387,023	393,424
Investment property		857	954	905
Investments in associates		1,605	9,569	1,404
Trade and other receivables		-	-	64,967
Retirement benefit assets	17	4,436	46,356	37,674
Deferred tax assets		15,667	24,476	17,098
Total non-current assets		753,204	823,921	872,701

Current assets
Inventories		129,153	110,920	142,789
Trade and other receivables		136,255	199,132	114,417
Cash and cash equivalents	12	126,039	70,532	117,949
Available for sale financial assets		79	612	290
Derivative financial instruments		-	2,803	1,836
Total current assets		391,526	383,999	377,281
Total assets		1,144,730 _________	1,207,920 _________	1,249,982 _________

EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital	10	128,371	127,595	128,125
Share premium	11	111,808	107,751	110,366
Other reserves	11	(5,906)	1,800	1,659
Retained earnings	11	38,995	(28,853)	38,663
		273,268	208,293	278,813
Minority interest in equity		5,241	4,350	4,196
Total equity		278,509	212,643	283,009

LIABILITIES
Non-current liabilities
Borrowings	12	377,523	426,069	316,334
Derivative financial instruments		25,044	38,973	42,086
Retirement benefit obligations	17	41,732	81,508	63,458
Other payables		7,647	11,537	8,033
Provisions for other liabilities and charges	13	13,436	13,937	18,804
Deferred tax liabilities		38,868	42,114	37,845
Government grants		1,113	1,121	1,160
Total non-current liabilities		505,363	615,259	487,720

Current liabilities
Borrowings	12	20	219	81,919
Derivative financial instruments		4,817	-	120
Trade and other payables		317,291	323,945	359,278
Provisions for other liabilities and charges	13	10,802	27,313	10,902
Income taxes payable		27,928	28,541	27,034
Total current liabilities		360,858	380,018	479,253
Total liabilities		866,221	995,277	966,973
Total equity and liabilities		1,144,730 __________	1,207,920 __________	1,249,982 __________

  Group Condensed Cash Flow Statement

for the half year ended 28 March 2008

	Note	Half year ended  28 March 2008 (Unaudited) €'000	Half year ended  30 March 2007 (Unaudited) €'000	Year ended  28 September 2007 (Audited) €'000
Cash flows from operating activities
Cash generated from operations before exceptional items	16	2,141	40,827	101,544
Cash inflows/(outflows) related to exceptional items		81,820	(9,438)	17,981
Interest paid		(17,666)	(16,345)	(33,842)
Tax paid		(59)	(251)	(1,386)
Net cash inflows from operating activities		66,236	14,793	84,297

Cash flows from investing activities
Dividends received from associates		44	537	728
Purchase of property, plant, equipment and software		(20,836)	(22,456)	(49,200)
Acquisition of undertakings		(19,577)	(1,036)	(1,840)
Disposal of undertakings and investment in associate		(75)	5,099	40,640
Interest received		4,458	755	2,741
Government grants (repaid)/received		(14)	-	69
Net cash outflows from investing activities		(36,000)	(17,101)	(6,862)

Cash flows from financing activities
Proceeds from issue of shares		193	133	899
Decrease in borrowings		(1,144)	(348)	(16,956)
Decrease in finance lease liabilities		(48)	(53)	(128)
Dividends paid to equity holders of the Company		(8,563)	(5,687)	(18,361)
Dividends paid to minority interests		(25)	(99)	(749)
Net cash outflows from financing activities		(9,587)	(6,054)	(35,295)
Net increase/(decrease) in cash and cash equivalents		20,649 ________	(8,362) ________	42,140 ________

Reconciliation of opening to closing cash and cash equivalents
Cash and cash equivalents at beginning of period		117,949	78,967	78,967
Translation adjustment		(12,559)	(73)	(3,158)
Increase/(decrease) in cash and cash equivalents		20,649	(8,362)	42,140
Cash and cash equivalents at end of period		126,039 ________	70,532 ________	117,949 ________

  Group Condensed Statement of Recognised Income & Expense

for the half year ended 28 March 2008

	Half year ended  28 March 2008 (Unaudited) €'000	Half year ended  30 March 2007 (Unaudited) €'000	Year ended  28 September 2007 (Audited) €'000
Items of income and expense taken directly within equity
Currency translation differences	(5,977)	(884)	(723)
Actuarial (loss)/gain on Group defined benefit pension schemes	(25,018)	7,617	6,764
Deferred tax on Group defined benefit pension schemes	(51)	1,177	(1,171)
Share of actuarial gain on defined benefit pension schemes of associates (net)	-	894	1,947
Fair value available for sale financial assets	(178)	82	(223)
Cash flow hedges:
(Loss)/gain taken to equity	(2,714)	58	(166)
Transferred to income statement in the period	70	(246)	(333)
Deferred tax on cash flow hedge	740	56	150
Net (expense)/income recognised directly within equity	(33,128)	8,754	6,245
Group result for the financial period	42,868	31,512	111,763
Total recognised income and expense for the financial period	9,740 ________	40,266 ________	118,008 ________

Attributable to:
Equity shareholders	8,670	39,389	116,635
Minority interests	1,070	877	1,373
Total recognised income and expense for the financial period	9,740 ________	40,266 ________	118,008 ________

  Notes to the Group Condensed Financial Statements

for the half year ended 28 March 2008

1. Basis of Preparation

The Group Condensed Financial Statements have been prepared in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the related Transparency Rules of the Irish Financial Services Regulatory Authority and with IAS 34 - Interim Financial Reporting as adopted by the European Union.

These condensed financial statements do not comprise statutory accounts within the meaning of Section 19 of the Companies (Amendment) Act 1986. The Group condensed financial information for the year ended 28 September 2007 represents an abbreviated version of the Group's full year financial statements for that year. Those financial statements contained an unqualified audit report and have been filed with the Registrar of Companies.

2. Accounting Policies

The accounting policies and methods of computation adopted in the preparation of the Group Condensed Financial Statements are consistent with those applied in the Annual Report for the financial year ended 28 September 2007 and are described in those financial statements.

The Group did not adopt any new International Financial Reporting Standards (IFRS) or Interpretations in the period that have had a material impact on the Group Condensed Financial Statements for the half year. The Group adopts IFRS 7 - Financial Instruments: Disclosures in the current year, however, as this report contains only condensed financial statements, full IFRS 7 disclosures are not required at this time. The Group will disclose the required additional information about its financial instruments, their significance and the nature and extent of risks to which they give rise in the annual financial statements.

3. Segment Information

The Group's primary reporting format is by business segment. There are two primary business segments: (i) Convenience Foods and (ii) Ingredients & Related Property.

	Revenue - half year		Operating Profit (before amortisation)  - half year		Amortisation of acquisition related intangible assets - half year		Operating Profit  (after amortisation)  - half year
	2008 €'000	2007 €'000	2008 €'000	2007 €'000	2008 €'000	2007 €'000	2008 €'000	2007 €'000
Continuing Operations
Convenience Foods	451,240	477,821	27,853	31,846	(180)	-	27,673	31,846
Ingredients & Related Property	197,415	154,890	13,202	8,200	-	-	13,202	8,200
	648,655   _____	632,711   _____	41,055  _____	40,046  _____	(180)   _____	-  _____	40,875   _____	40,046  _____

4. Seasonality

The Group's convenience foods portfolio is second-half weighted. This weighting is primarily driven by weather and seasonal buying patterns impacting, in particular, the demand for chilled product categories.

5. Exceptional Items

	Note	Half year 2008	Half year 2007
		€'000	€'000
Discontinued operations
Exit from sugar processing	(a)	18,128	-
Profit on business disposals	(b)	-	3,064
Total discontinued operations (net of tax)		18,128   ______	3,064   ______

(a) Exit from sugar processing

During 2006, Greencore confirmed its intention to exit sugar processing in Ireland, renounce its quota and apply for EU restructuring aid under the Council Regulations (EC) No. 320/2006 and No. 968/2006 (the Regulations). The total EU restructuring aid available for the sugar quota renounced by Greencore was €145.5m. The Regulations gave the Member State responsibility for the allocation of this aid between Greencore, sugar beet growers and machinery contractors.

In July 2006, the Government announced that it was allocating €98.4m to Greencore. The Board of Directors of Greencore rejected the basis of this allocation and sought a judicial review of the decision in the High Court. At March 2007, the Group had recognised the present value of a receivable totalling €98.4m while continuing to pursue the High Court challenge. The findings of this judicial review were issued in June 2007 and the Government's decision regarding allocation of the restructuring aid was quashed.

On 26 September 2007, the European Council approved changes to the sugar restructuring scheme and, on 9 October 2007, the EU published amendments to the relevant regulations. These amendments resulted in Greencore becoming entitled to a minimum amount of €112.1m. As a result, Greencore recognised restructuring aid totalling the present value of €112.1m in its accounts for the year ended 28 September 2007.

Subsequent to the year end the Government entered into a new EU aid allocation process. As a consequence of this process, the Government concluded that Greencore was entitled to €127.0m of restructuring aid. The Group recognises an exceptional gain of €16.9m in the half year to March 2008 as a result of this decision. At March 2008, the Group has received payment of its entire allocation of €127.0m. As required by the Regulations, the Group has provided security to the Government of Ireland for an amount equivalent to 120% of restructuring aid received in February 2008. The security totals €100.1m and is in the form of a bank guarantee. The guarantee becomes payable if the Group does not complete its commitments under its restructuring plan, at which time, the part of the aid granted in respect of the commitment concerned can be recovered from the Group (see note 14).

The financial consequences to Greencore are as follows:

	Half year 2008	Half year 2007
	€'m	€'m
Reversal of write-down and impairment of assets	1.2	-
Recognition of additional EU restructuring aid	_16.9	____-
Net exceptional gain	18.1  _____	-  _____

(b) Profit on business disposals

Exceptional gains of €3.1m arose on the disposal of Agribusinesses whose activities were closely related to sugar processing (a business which Greencore exited during the year ended 29 September 2006).

6. Taxation

Interim period tax is accrued using the tax rate that is estimated to be applicable to expected total annual earnings, that is the estimated average annual effective income tax rate applied to the taxable income of the interim period.

7. Dividends Paid and Proposed

A dividend of 8.21 cent per share was approved at the AGM on 14 February 2008 as a final dividend in respect of the year ended 28 September 2007 and a total of €8.1m was paid, to those shareholders that did not avail of the Group scrip dividend scheme, on 4 April 2008.

An interim dividend of 5.30 cent (2007: 5.05 cent) per share is payable on 3 October 2008 to the shareholders on the Register of Members as of 6 June 2008. The ordinary shares will be quoted ex-dividend from 4 June 2008. The dividend will be subject to dividend withholding tax, although certain classes of shareholders may qualify for exemption.

The liability in respect of this interim dividend is not recognised in the balance sheet of the Group for the half year ended 28 March 2008 because the interim dividend had not been approved at this balance sheet date (but was subsequently declared by the Directors of the Company).

8. Earnings per Ordinary Share

Basic earnings per ordinary share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Company and held as treasury shares. The adjusted figures for basic and diluted earnings per ordinary share are after the elimination of exceptional items, effect of foreign exchange (FX) on inter-company balances and external loans where hedge accounting is not applied, the movement in the fair value of all derivative financial instruments and related debt adjustments and the amortisation of acquisition related intangible assets.

	Half year 2008 €'000	Half year 2007 €'000
Adjusted EPS
Profit attributable to equity holders of the Company	41,798	30,635
Exceptional items	(18,128)	(3,064)
Fair value of derivative financial instruments and related debt adjustments	3,354	(3,574)
FX on inter-company balances & external loans where hedge accounting is not applied	(1,325)	(22)
Amortisation of acquisition related intangible assets	180	-
Adjusted profit after taxation and minority interests	25,879	23,975

	Half year 2008 cent	Half year 2007 cent
Basic earnings per ordinary share	20.9	15.4
Exceptional items	(9.1)	(1.5)
Fair value of derivative financial instruments and related debt adjustments	1.7	(1.8)
FX on inter-company balances & external loans where hedge accounting is not applied	(0.6)	(0.0)
Amortisation of acquisition related intangible assets	0.1	-
Adjusted basic earnings per ordinary share	13.0	12.1

Weighted average number of ordinary shares in issue during the period (thousands)

199,813

198,564

	Half year 2008 €'000	Half year 2007 €'000
Continuing adjusted EPS
Profit attributable to equity holders of the Company	41,798	30,635
Discontinued profit for the period	-	(571)
Exceptional items	(18,128)	(3,064)
Fair value of derivative financial instruments and related debt adjustments	3,354	(3,574)
FX on inter-company balances & external loans where hedge accounting is not applied	(1,325)	(22)
Amortisation of acquisition related intangible assets	180	-
Adjusted profit after taxation and minority interests	25,879	23,404

	Half year 2008 cent	Half year 2007 cent
Basic earnings per ordinary share	20.9	15.4
Discontinued profit for the period	-	(0.3)
Exceptional items	(9.1)	(1.5)
Fair value of derivative financial instruments and related debt adjustments	1.7	(1.8)
FX on inter-company balances & external loans where hedge accounting is not applied	(0.6)	(0.0)
Amortisation of acquisition related intangible assets	0.1	-
Adjusted continuing basic earnings per ordinary share	13.0	11.8

	Half year 2008 €'000	Half year 2007 €'000
Discontinued adjusted EPS
Discontinued profit for the period	-	571

	Half year 2008 cent	Half year 2007 cent
Discontinued adjusted earnings per ordinary share	-	0.3

Diluted earnings per ordinary share

Diluted earnings per ordinary share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Employee share options, which are performance based, are treated as contingently issuable shares, because their issue is contingent upon satisfaction of specified performance conditions in addition to service. These contingently issuable ordinary shares are excluded from the computation of diluted earnings per ordinary share where the conditions governing vesting have not been satisfied as at the end of the reporting period. Options over 6,140,838 (2007: 6,275,000) shares were excluded from the diluted EPS calculation as they were either antidilutive or contingently issuable ordinary shares which had not satisfied the performance conditions attaching at the end of the reporting period.

	Half year 2008  cent	Half year 2007 cent
Diluted earnings per ordinary share	20.8	15.4
Exceptional items	(9.0)	(1.5)
Fair value of derivative financial instruments and related debt adjustments	1.6	(1.8)
FX on inter-company balances & external loans where hedge accounting is not applied	(0.6)	(0.0)
Amortisation of acquisition related intangible assets	0.1	-
Adjusted diluted earnings per ordinary share	12.9	12.1

Weighted average number of ordinary shares (thousands)

200,506

199,064

	Half year 2008  cent	Half year 2007 cent
Diluted earnings per ordinary share	20.8	15.4
Discontinued profit for the period	-	(0.3)
Exceptional items	(9.0)	(1.5)
Fair value of derivative financial instruments and related debt adjustments	1.6	(1.8)
FX on inter-company balances & external loans where hedge accounting is not applied	(0.6)	(0.0)
Amortisation of acquisition related intangible assets	0.1	-
Adjusted continuing diluted earnings per ordinary share	12.9	11.8

Adjusted discontinued diluted earnings per ordinary share

-

0.3

A reconciliation of the weighted average number of ordinary shares used for the purposes of calculating the diluted earning per share amounts is as follows:
	Half year 2008	Half year 2007
Weighted average number of ordinary shares in issue during the period (thousands)	199,813	198,564
Dilutive effect for share options (thousands)	693	500
Weighted average number of ordinary shares for diluted earnings per share (thousands)	200,506 ________	199,064 ________

9. Capital Expenditure and Commitments

During the six month period to 28 March 2008 the Group spent €20.8m (2007: €22.5m) on additions to tangible and intangible fixed assets. The Group also disposed of certain assets with a carrying amount of €7.4m (2007: €0.5m) for proceeds of €9.7m (2007: €2.6m).

At 28 March 2008 the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to €11.5m (2007: €3.0m).

10. Equity Share Capital

Issued capital as at 28 March 2008 amounted to €128.4m (28 September 2007: €128.1m) of which €2.5m (28 September 2007: €2.5m) is attributable to treasury shares. The increase in capital was due to the issue of 291,958 shares in respect of the Group scrip dividend scheme and 98,091 share options exercised under the Group Save As You Earn (SAYE) scheme. There were no share options granted under the Group Executive Share Options Scheme or the Group SAYE scheme in the period from 29 September 2007 to 28 March 2008.

11. Reconciliation of Movements in Shareholders' Equity

		Other reserves
	Share premium	Share options	Capital conversion  reserve fund	Hedging reserve	Foreign  currency  translation  reserve	Available-for-sale  investment  reserve	Retained earnings	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
At 29 September 2007	110,366	1,056	934	(77)	101	(355)	38,663	150,688
Premium on issue of shares	1,442	-	-	-	-	-	-	1,442
Actuarial loss on Group defined benefit pension schemes	-	-	-	-	-	-	(25,018)	(25,018)
Employee share option expense	-	494	-	-	-	-	-	494
Dividends	-	-	-	-	-	-	(16,397)	(16,397)
Cash flow hedges
fair value losses in period	-	-	-	(2,714)	-	-	-	(2,714)
tax on fair value loss	-	-	-	760	-	-	-	760
transfers to income statement	-	-	-	70	-	-	-	70
tax on transfers to income statement	-	-	-	(20)	-	-	-	(20)
Fair value available for sale financial assets	-	-	-	-	-	(178)	-	(178)
Currency translation differences	-	-	-	-	(5,944)	(33)	-	(5,977)
Deferred tax on Group defined benefit pension schemes	-	-	-	-	-	-	(51)	(51)
Group profit for the financial period attributable to equity holders of the Company	-	-	-	-	-	-	41,798	41,798
At 28 March 2008	111,808 ________	1,550 ________	934 ________	(1,981) ________	(5,843) ________	(566) ________	38,995 ________	144,897 ________

		Other reserves
	Share premium	Share options	Capita conversion  reserve fund	Hedging reserve	Foreign currency  translation reserve	Available-for-sale  investment  reserve	Retained earnings	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
At 30 September 2006	104,137	674	934	272	807	(115)	(54,156)	52,553
Premium on issue of shares	3,614	-	-	-	-	-	-	3,614
Actuarial gain on Group defined benefit pension schemes	-	-	-	-	-	-	7,617	7,617
Share of actuarial gains on pension of associates (net)	-	-	-	-	-	-	894	894
Employee share option expense	-	162	-	-	-	-	-	162
Dividends	-	-	-	-	-	-	(15,053)	(15,053)
Cash flow hedges
fair value gains in period	-	-	-	58	-	-	-	58
tax on fair value gains	-	-	-	(18)	-	-	-	(18)
transfers to income statement	-	-	-	(246)	-	-	-	(246)
tax on transfers to income statement	-	-	-	74	-	-	-	74
Fair value available for sale financial assets	-	-	-	-	-	82	-	82
Currency translation differences	-	-	-	-	(884)	-	-	(884)
Deferred tax on Group defined benefit pension schemes	-	-	-	-	-	-	1,177	1,177
Deferred tax on employee share options	-	-	-	-	-	-	33	33
Group profit for the financial period attributable to equity holders of the Company	-	-	-	-	-	-	30,635	30,635
At 30 March 2007	107,751 ________	836 ____ ____	934 __ ______	140 ________	(77) ________	(33) ____ ____	(28,853) ________	80,698 ________

12. Components of Net Debt and Financing

During the period the Group maintained its existing bank facilities. Acquisitions in the period were financed out of the existing facilities. The cash flows from financing activities are set out in the Group Condensed Cash Flow Statement.

	28-Mar-08	30-Mar-07
	€'000	€'000
Net Debt
Current assets
Cash and cash equivalents	126,039	70,532
Current liabilities
Borrowings	(20)	(219)
Non-current liabilities
Borrowings before fair value adjustment	(401,426)	(463,291)
Comparable net debt	(275,407)	(392,978)
Borrowings - fair value adjustment (non-current liabilities)	23,903	37,222
Group net debt	(251,504)  _________	(355,756)  _________

	Half year 2008	Half year 2007
	€'000	€'000
Net Finance Costs
Net finance costs on interest bearing cash and cash equivalents and borrowings	(15,588)	(15,356)
Net pension financing credit	4,487	5,077
Change in fair value of derivatives, related debt adjustments and foreign exchange on inter-company balances & external loans where hedge accounting is not applied	(2,029)	3,596
Unwind of present value discount on non-current payables	(57)	-
Income arising on the increase in the present value of the EU receivable	1,522	1,238
	(11,665) _________	(5,445) _________
Analysed as:
Finance income	22,915	21,227
Finance costs	(34,580)	(26,672)
	(11,665) __ _______	(5,445) _ ________

Comparable net debt is a non-IFRS measure used by the Group as a key performance indicator.

13. Provisions for Liabilities and Charges

		Half year 2008 €'000
Six months ended 28 March 2008
At beginning of period		29,706
Utilised in period		(4,383)
Currency translation differences		(1,085)
At end of period		24,238 ________

	28-Mar-08 €'000	28-Sep-07 €'000
Analysed as:
Non-current liabilities	13,436	18,804
Current liabilities	10,802	10,902
	24,238 ________	29,706 ________

Provisions for liabilities and charges are comprised of environmental, restructuring and other provisions.

Environmental

Environmental obligations and related costs arose primarily from the Group's discontinued sugar processing operations and have been established to cover either a statutory or constructive obligation of the Group to carry out remedial works.

Restructuring

Restructuring provisions relate to irrevocable commitments in respect of programmes commenced and committed to in the Ingredients & Related Property segment, primarily related to the exit from sugar processing.

Other

Other provisions primarily consists of a) provisions for leasehold dilapidations in respect of certain leases, relating to the estimated cost of reinstating leasehold premises to their original condition at the time of the inception of the lease as provided for in the lease agreement, and b) provision for onerous contractual obligations for properties held under operating leases.

14. Contingencies

Certain subsidiaries of the Group continue to be subject to legal proceedings. Provisions for anticipated settlement costs and associated expenses arising from legal and other disputes are made where a reliable estimate can be made of the probable outcome of the proceedings.

As required by Commission Regulation (EC) No 968/2006, the Group has provided security to the Government of Ireland in the form of a bank guarantee amounting to 120% of restructuring aid received in February 2008 (€83.4m). Previous security provided for amounts received in 2007 has been released in the period. The guarantee becomes payable if the Group does not complete its commitments under it's restructuring plan, at which time, that part of the aid granted in respect of the commitment concerned can be recovered from the Group. The Group continues to perform its commitments under its restructuring plan and accordingly, in the opinion of the Directors, the repayment of any restructuring aid received is considered to be remote and therefore no provision has been recognised in the Group Condensed Financial Statements in respect of this guarantee.

15. Acquisition of Undertakings

During the period the Group completed two business combinations which are reported within the Convenience Foods business segment. These transactions have been accounted for by the purchase method of accounting and the details of each are as follows:

Blaen Twyni

On 7 December 2007, the Group acquired a 100% interest in the Danone water business in Wales. The consideration was in the form of a cash payment. An excess of the fair value of identifiable net assets acquired over consideration paid arose on this acquisition. This amount of €1.4m has been recognised immediately in the Group Condensed Income Statement.

Ministry of Cake Holdings Ltd

On 10 December 2007, the Group acquired 100% of the issued share capital of Ministry of Cake Holdings Ltd, a foodservice dessert manufacturer. The consideration comprises both a cash payment and a deferred contingent cash element.

Neither of these acquisitions are considered sufficiently material to warrant separate disclosure of the fair values attributable to these combinations and accordingly they are disclosed in aggregate. The carrying amounts of the assets and liabilities acquired, determined in accordance with IFRS before completion of the combination, together with the adjustments made to those carrying values to arrive at the fair values were as follows:

	Book  value	Fair value adjustment	Fair  value
	€'000	€'000	€'000
Identifiable net assets acquired (excluding net debt assumed)
Assets
Property, plant and equipment	9,421	(379)	9,042
Intangible assets
Goodwill	-	12,342	12,342
Excess of fair value of identifiable net assets over consideration paid	-	(1,390)	(1,390)
Other intangibles	-	2,695	2,695
Inventories	2,068	(230)	1,838
Trade and other receivables	3,896	-	3,896
Total assets	15,385	13,038	28,423
Liabilities
Trade & other payables & deferred tax	(4,268)	(1,549)	(5,817)
Total enterprise value	11,117 ________	11,489 ________	22,606 ________
Satisfied by:
Cash payments			12,677
Professional fees incurred on business combinations			296
Cash acquired			(34)
Net cash outflow			12,939
Net debt assumed on acquisition:
Debt acquired			6,655
Deferred acquisition consideration (stated at net present cost)			3,012
Total consideration - enterprise value			22,606 ________

The fair values of the assets acquired have been determined provisionally as at 28 March 2008 and may be subject to change in the financial statements for the year ended 26 September 2008 as the Group has yet to finalise the fair value of the net identifiable assets acquired.

The principal factors contributing to the recognition of goodwill on the above business combination are accessing new markets and the realisation of cost savings and synergies with existing entities in the Group.

The post acquisition impact of the business combinations completed during the period on Group profit for the financial period was an increase in profit of €0.1m.

The revenue and profit for the financial period of the Group determined in accordance with IFRS as though the acquisition date for the business combinations effected during the period had been the beginning of the period would be €652.6m and €43.0m respectively.

16.    Reconciliation of Operating Profit to Net Cash Flow from Operating Activities before Exceptional Items

	Half year 2008 €'000	Half year 2007 €'000	Year ended 2007 €'000
Operating profit (pre-exceptional)	40,875	40,046	91,041
Depreciation, net of grants	14,099	16,732	29,649
Amortisation of intangibles	625	406	1,148
Employee share option expense	494	162	382
Difference between pension charge and cash contributions (pre-exceptional)	(3,434)	(3,143)	(5,998)
Changes in working capital	(52,153)	(13,593)	(16,097)
Other movements	1,635	217	1,419
Net cash inflow from operating activities before exceptional items	2,141  ________	40,827 ________	101,544 ________

17. Retirement Benefit Schemes

In consultation with the independent actuaries to the schemes, the valuation of the pension obligation has been updated to reflect current market discount rates and rates of increases in salaries, pension payments and inflation, current market values of investments and actual investment returns.

The principal actuarial assumptions are as follows:

	28-Mar-08	28-Sep-07
Rate of increase in salaries	3.5% - 4.5%	3.25% - 4.25%
Rate of increase in pension payment	2.4% - 3.5%	2.3% - 3.25%
Discount rate	6.1% - 6.8%	5.4% - 5.8%
Inflation assumptions	2.4% - 3.5%	2.3% - 3.25%

The market value of the assets of the schemes were as follows:

	28-Mar-08
	Eurozone €'000	UK €'000	Total €'000
Total market value of assets	298,810	153,550	452,360
Present value of scheme liabilities	(300,681)	(188,975)	(489,656)
Deficit in scheme	(1,871)	(35,425)	(37,296)
Deferred tax asset	295	9,714	10,009
Net liability at 28 March 2008	(1,576) _ _______	(25,711) ________	(27,287)  ________

	28-Sep-07
	Eurozone €'000	UK €'000	Total €'000
Total market value of assets	355,342	191,971	547,313
Present value of scheme liabilities	(322,998)	(250,099)	(573,097)
Surplus/(deficit) in schemes	32,344	(58,128)	(25,784)
Deferred tax (liability)/asset	(4,454)	16,046	11,592
Net asset/(liability) at 28 September 2007	27,890 _ _______	(42,082)   ________	(14,192)  _ ______

18. Subsequent Events

On 29 April 2008 the Group acquired 100% of the share capital of Home Made Brand Foods Inc (HMBF), a chilled foods manufacturer, for a cash consideration of US$44m plus deferred contingent consideration up to a maximum of US$10m, depending on HMBF's performance in the financial year to 31 December 2008. The acquisition is expected to be modestly EPS accretive from the financial year ended September 2009. The Group is in the process of assessing the fair values of the net assets acquired and as such, the provisional fair values of assets and the goodwill arising on the transaction will be disclosed in the Group Financial Statements for the year ended 26 September 2008.

After the period end, Greencore Malt experienced an incident which led to significant fire damage to part of its malting facility at Ghlin, Belgium. The facility is insured as part of the Group's insurance programme and Greencore Malt is working with its customers to ensure continuity of supply. Production will be disrupted for a number of weeks but the financial impact of the fire is unlikely to be material.

19. Information

The Half Yearly Financial Report is being sent to registered shareholders by post or electronically to those who have elected for the Electronic Shareholder Communications Option.

Copies are also available from the Company's registered office at St Stephen's Green House, Earlsfort Terrace, Dublin 2, Ireland and from its registrar, Computershare Investor Services (Ireland) Limited, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland. The statement will also be available on the Company's website at www.greencore.com.

 

END

 

 

IR ILFEREVIDFIT