Strategic investments in Greencore USA

RNS Number : 8532A

Greencore Group PLC

25 February 2014

 

25 February 2014

Greencore Group plc - Strategic investments in Greencore USA

Acquisition of Lettieri's, LLC

Greencore Group plc ("Greencore", the "Group") today announces that it has acquired Lettieri's, LLC ("Lettieri's").

Lettieri's is a leading manufacturer of food to go products for the US convenience store channel. It operates from a modern, purpose-built facility in Shakopee, Minnesota and employs approximately 130 staff. For the year ended March 2013, it generated revenue of $36.4m (£21.9m) and attributable EBITDA of $4.7m (£2.8m). The transaction will be funded from existing debt facilities and is expected to be modestly earnings accretive in the current financial year.

Lettieri's products are manufactured frozen but served hot via roller grills and heated cabinets.  They form a primary component of the food to go offering in convenience stores, alongside chilled food to go items such as fresh sandwiches.  The product range includes assembled products (e.g. breakfast sandwiches), extruded products (e.g. stuffed baguettes and breadsticks) and enrobed products (e.g. wrap dogs) for the roller grill.

Investment in Jacksonville

Greencore also confirms that it is investing approximately $10.0m (£6.0m) in its Jacksonville, Florida facility in order to create the capability to manufacture frozen food to go products.  The investment will provide capacity to support up to $100m (£60m) of revenue in products designed for hot eating at both the breakfast and lunchtime occasions.  The Group anticipates that the first such products will come to market in the final quarter of FY14.

Commenting on these investments, Patrick Coveney, Chief Executive Officer of Greencore, said:

"We have been working since 2011 to build a focused, growing, food to go business in the US.  Today's announcement represents an important further step on that journey.  Both the Lettieri's acquisition and the capital investment into Jacksonville deepen our manufacturing capability and widen our product range to more fully serve the food to go needs of our customers in the small store channels.  Both investments are consistent with our long-term approach of developing high quality manufacturing facilities to meet the specific growth strategies of our key US customers."

For further information:

Alan Williams	Chief Financial Officer	Tel: + 353 1 605 1045
Rob Greening or Lisa Kavanagh	Powerscourt	Tel: + 44 20 7250 1446

Notes to Editors

1)    Lettieri's operates from a modern, purpose-built facility in Shakopee, Minnesota and employs approximately 130 staff

2)    US dollar values have been converted to GBP using an exchange rate of 1.66

3)    Historical financial information for Lettieri's is extracted from unaudited management accounts

4)    This announcement contains certain forward looking statements with respect to the financial conditions, results of operations and businesses of the Group. These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements. Nothing in this announcement should be construed as a profit forecast.

About Greencore:

·     A leading manufacturer of convenience food in the UK and the US

·     Strong market positions in the UK convenience food market across food to go, chilled prepared meals, chilled soups and sauces, ambient sauces & pickles, cakes & desserts and Yorkshire puddings

·     A fast growing food to go business in the US, serving both the convenience and small store channel and the grocery channel

 

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