PAMELA NEWENHAM

Greencore has sold its foodservice desserts business Ministry of Cake for a total consideration of £11 million, including an upfront cash consideration of £8 million.

Reporting an increase in revenues and profit yesterday, Greencore chief executive Patrick Coveney said the convenience food group disposed of Ministry of Cake to focus on its main business.

He said the deferred consideration of £3 million would be dependent on certain targets being met.

Greencore reported a 14 per cent increase in operating profit to £37.2 million for the 26 weeks ended March 28th. Group revenue climbed 8 per cent, or 9.3 per cent per cent on a like-for-like basis, to £619.8 million during the period.

The convenience foods division reported year on year revenue growth of 8.4 per cent to £587.9 million. Operating profit in the division climbed 14.9 per cent to £35 million.

Net debt was £257 million, up £25.1 million year-on-year.

Mr Coveney said the business delivered a “strong first half performance”, driving 18.6 per cent earnings per share (EPS) growth.

“Our strategy of focusing on the food to go market is working well in both the UK and the US.”

He attributed the growth to consumers buying more convenience foods for breakfast and lunch as a result of the recovering economy.

Mr Coveney said the company has stepped up strategic investments in Minneapolis, Jacksonville, Rhode Island where it is to build a new site.

“By this time next year we will have taken the capacity of our business in America from $350 million to $600 million,” he said.

Greencore yesterday announced plans to invest £30 million in its Northampton food to go facility. Mr Coveney said the investment comes on the back of confirmed business with Marks & Spencer.

Greencore announced an 18.6 per cent increase in adjusted earnings per share to 7pm and an interim dividend of 2.2p per share, up 15.8 per cent compared to the first half of 2013.