Shares in sandwich maker Greencore have dropped more than 29 per cent after warning on profits

 
Rebecca Smith
Bitten off more than it can chew? The group has flagged space capacity at US factories
Bitten off more than it can chew? The group has flagged space capacity at US factories (Source: Getty)

Shares in sandwich maker Greencore had dropped more than 29 per cent by midday today, after the firm warned on profits this morning.

The profit warning came alongside a hefty US restructuring, in order to match the capacity the company has to its commercial pipeline.

Greencore added a crop of new recruits to its senior team, while chief operating officer of Greencore US, Chuck Metzger, now has day-to-day responsibility for the US business.

Greencore said that the boss of its US division, Chris Kirke, will be leaving the group to return to the UK, while chief executive Patrick Coveney will take "a direct role" in the leadership of Greencore US, spending half his time over there now in order to improve its outlook.

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Looking ahead, the firm said it continues to expect good organic revenue growth, and that its core business in the US has continued to perform in line with expectations.

But, it said the weak performance of its underutilised original sites in the first half of the year, "combined with the timing of new business contributions" and the current exchange rate, will impact its expected rate of US profit growth for the year.

Greencore said it now expects adjusted earnings per share in the range of 14.7p to 15.7p and around two-thirds of that being delivered in the second half of the year.

At the end of 2016, Greencore announced a $747.5m takeover of US firm Peacock Foods, saying that would "add significant scale" to its operations.

But it had been grappling with "continued low capacity utilisation" at some of the original Greencore US sites.

It is now restructuring the US network to better reflect the commercial pipeline and try and tackle the capacity problem.

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