Impact of issues uncovered in
GREENCORE GROUP PLC ('Greencore' or the 'Group') announces that it has uncovered a deliberate concealment of costs at its Mineral Water business which has led to a material misstatement of financial performance covering the financial years 2006, 2007 and the current financial year. Whilst its investigations are ongoing, the Board of Greencore believes that the financial implications of these issues will lead to a restatement reducing the Group's operating profit by €4m for 2006 and by €8m for 2007. In addition, the estimated impact of this issue in 2008 will be a reduction of operating profit of €9m relative to current expectations, with a consequent impact on adjusted earnings per share of 4 cents.
Since this issue was first identified, the priority of the Board has been to move quickly to determine the cause, extent and impact of the concealment. The key steps in this process were:
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1. |
June 6th: |
After a scheduled review by the internal audit function, a source of potential concern in the Mineral Water business was communicated to Group senior finance management. |
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2. |
June 9th: |
Following a meeting between the leadership of Group finance and the finance director of the Mineral Water business, an immediate investigation was instigated by the Group chief financial officer. |
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3. |
June 13th: |
As the initial elements of this investigation were completed, the Greencore Board was advised on the potential issues. |
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4. |
June 20th: |
A report containing a provisional analysis of the financial accounts for the three years in question, identifying the concealment issues, sharing the external financial and legal advice, and setting out options on how to proceed was submitted to the Board. |
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5. |
June 23rd: |
Both the Audit Committee and the Board met to review the report, consider the issues in it, assess options on how to proceed and identify critical outstanding points to be clarified. |
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6. |
June 24th: |
The Board met to conclude on the financial impact of the concealment and to take further legal and financial advice on how to proceed. |
The investigation indicates that this concealment of costs was undertaken by the former financial controller of the Mineral Water business who left the business prior to the concealment being uncovered. The three managers with direct supervisory responsibility for the former financial controller have left the business. A new managing director and acting finance director for the Mineral Water business have been appointed.
The Group is taking legal advice on what, if any, elements of this financial impact can be recovered.
While the Board believes this to be an isolated issue, it is conducting a thorough review (independently supported by KPMG) of all the Group's businesses and of its internal control, financial reporting and external audit processes.
Apart from adjusting for the impact of this material misstatement, the Board, based on current trading, remains confident that it will meet consensus market expectations for 2008 EPS performance.
For further information, please contact:
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Patrick Coveney, Group Chief Executive |
+353 (0)1 605 1045 |
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Geoff Doherty, Chief Financial Officer |
+353 (0)1 605 1018 |
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Eoin Tonge, Group Capital Markets Director |
+353 (0)1 605 1036 |
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Billy Murphy or Anne-Marie Curran, Drury Communications |
+353 (0)1 260 5000 |
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Rory Godson or Elizabeth Rous, Powerscourt |
+44 (0)207 250 1446 |
Greencore Group
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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 |
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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 |
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Extending presence outside the UK with fast-growing convenience food businesses in the US, The Netherlands and Ireland |
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A leading malt producer in Ireland, the UK and Belgium |
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Significant property assets in Ireland and the UK |
Greencore Mineral Water
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The leading mineral and spring water producer in the UK with sources in both Scotland and Wales |
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Largest mineral water facility in Scotland |
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Produces more than 200 million units per annum |
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Broad customer base across major UK retailers |
This information is provided by RNS
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