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Greencore shares plunge as Bisto Yorkshire puddings group warns of lower 2018 profit, restructures US network

As part of the US restructuring, Greencore said its CEO Patrick Coveney will take a direct role in the business and spend half of his time in US to improve results
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The Ireland-based food producer said it is restructuring its US network due to low capacity utilisation

Greencore Group PLC (LON:GNC) saw its shares slump by almost 25% on Tuesday as the convenience food group warned that 2018 profit growth will be slower than expected and announced a restructuring of its US network.

The FTSE 250-listed firm said its 2018 earnings per share are expected to be between 14.7p-15.7p, with approximately two-thirds of that contribution delivered in the second half. That contrasts with current market expectations of 15.7p-16.6p.

READ: Greencore to sell its bottled water subsidiary to Highland Spring for up to £17.5mln

The Ireland-based food producer - whose brands include Bisto Yorkshire puddings, Bistro To Go sandwiches and salads - said it is restructuring its US network due to low capacity utilisation. The group bought Peacock Foods in the US in December 2016.

As part of the US restructuring, Greencore said its CEO Patrick Coveney will take a direct role in the business and spend half of his time in US to improve the results.

Greencore said its current Consumer Packaged Goods business continues to perform in line with expectations, however, the weak performance of underutilised original sites, combined with the currency exchange rate, will reduce the expected rate of the US profit growth.

In afternoon trading, Greencore shares were 24.3% lower at 138.3p.

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