Bread production more than doubles to meet Storm Emma demand
Lorcan Allen speaks to Michael McCambridge, managing director of McCambridge bakery, about the unprecedented spike in demand for bread this week.

This week’s arrival of Storm Emma - the so called ‘beast from the east’ - caused panic among shoppers across the country, who scrambled to stock up on supplies ahead of the snow.

The increased footfall through the doors of supermarkets and shops led to long queues and empty shelves for most staple foods.

The demand for bread was particularly high in recent days, as shoppers scurried to get their hands on a sliced pan ahead of the storm. Photos and videos posted to social media of empty bread shelves in major supermarkets added to the frenzy.

Speaking to the Irish Farmers Journal on Thursday, Michael McCambridge, managing director of Dublin-based bread maker McCambridge, said his company was forced to increase bread production by a factor of 2.5 to meet the unprecedented demand.

He added that his team has been in the business a long time and was well able to manage the spike in demand. McCambridge said the communication from retail customers had been excellent, which had also helped manage the situation.

“Demand was strong this week. However, I anticipate the end of the week being quiet following the red alert,” added McCambridge.

“No McCambridge vehicles will be driving during the hours covered by the red alert,” he said.

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Focus switches back to the UK for Greencore
The sandwich-maker had a positive start to the year with operating profits up 1% in the first 26 weeks.

Greencore, the sandwich-maker, has reported its first half results for the 26 weeks ending 29 March 2019.

The group reported revenues from continuing operations down 4.6% to £701.4m in the first half. Operating profits rose 0.9% to £44.7m with margins expanding by 40bps to 6.4%. Its food-to-go revenues (pro-forma) totalled £447.1m, up 7% on a reported basis.

Capital structure

Commenting on the results, Patrick Coveney, chief executive officer, said Greencore has had a good first half to the year, with clear financial and operational progress. He added that the group has reshaped and strengthened its capital structure, and now has a “robust foundation from which to pursue a range of new food-to-go products and channel opportunities”.

The group says it anticipates underlying revenue growth in its key convenience food categories

Greencore, which is now primarily focused on the UK food market, anticipates trading conditions to remain challenging in the seasonally more important second half of the year.

The group says it anticipates underlying revenue growth in its key convenience food categories and that this will underpin growth in operating profit in the full year.

The disposal of its entire US business to Hearthside Foods, which took place last November, is now complete. Net debt at the end of the first half decreased by £217m to £284m.

The group made a profit on disposal of £56.7m. Following the disposal, the group returned £509m to shareholders in the form of a tender offer, which was executed at the end of January this year. There was a £25.4m one-off charge as a result of restructuring its debt and the removal of US dollar assets.

The group reported adjusted earnings per share growth of 16.4% to 6.4p. It also declared an interim dividend of 2.45p.

Comment

While Greencore does have a considerably stronger balance sheet and a higher returns profile, achieving growth in this market will be challenging. That said, it is the leader in fresh sandwiches in the UK where it manufactures around 700m sandwiches and other food-to-go products annually. It also has 15 manufacturing sites across the UK, with industry-leading technology and supply chain capabilities which should make it a highly efficient manufacturer.

Money flows into plant-based burger companies
Two of the largest plant-based meat companies haves raised more than $0.5bn in the last few weeks.

Following on from plant-based burger company Beyond Meats’ stock market flotation two weeks ago, which raised $240m, its rival Impossible Foods has raised $300m this week.

This recent equity raise by Impossible Foods brings the company’s total equity raised to $750m and values the California-based company at about $2bn. The fund raise comes after it announced a partnership with Burger King in the US to roll out the “Impossible Whopper”.

Beyond Meat had an explosive public debut, with shares soaring 163% on its first day of trading

Impossible Foods has struggled to keep up with increased demand, with restaurants selling the Impossible Burger facing shortages in recent months.

Beyond Meat had an explosive public debut, with shares soaring 163% on its first day of trading. The initial public offer price valued Beyond Meat at $1.5bn. Since then, Beyond Meat’s share price has almost trebled, giving the company a market capitalisation of about $4bn.

Impossible Foods has raised rounds of $75m and $108m from investors including Google, Hong Kong billionaire Li Ka-shing’s Horizons Ventures, and Bill Gates.

Share redemption scheme opens at Kerry co-op
Lorcan Allen outlines the details in the new share redemption scheme being proposed by Kerry co-op.

On Monday this week, the application window for Kerry Co-op’s share redemption offer, known as the “cash for shares” scheme, opened for all shareholders in the co-op to apply. This is a voluntary scheme for shareholders and the application window will remain open for just over three weeks until Wednesday 5 June.

The scheme is designed to act as a new mechanism to give liquidity to Kerry Co-op shares, ie to make it easier for Kerry Co-op shareholders to sell their shares. At present, Kerry Co-op shareholders are effectively “locked in” as there’s no official market for trading shares.

Shareholders will vote at the AGM of Kerry Co-op on 19 June in Tralee on whether this new scheme should be approved. Kerry Co-op is still working with ICOS to establish whether this scheme needs a 50% or two-thirds majority to pass a shareholder vote.

Stake

Shareholders will also vote to change a rule in Kerry Co-op that will allow the board to reduce its stake in Kerry Group plc below 10%. The co-op currently holds a 13.7% shareholding in Kerry Group plc.

There are 13,335 shareholders in Kerry Co-op (see Figure 1), who hold just over 3.9m Kerry Co-op shares between them.

The average shareholding among A and B shareholders is believed to be around 400 shares

Of this total, 25% are what are known as A shareholders (active farmers). A further 25% are deemed to be B shareholders (retired from farming in the last five years), while the majority, or 50% of shareholders, are C shareholders (non-farmers).

Only A and B shareholders may vote at the upcoming AGM in June. While C shareholders cannot vote, they are eligible to participate in the redemption scheme.

The average shareholding among A and B shareholders is believed to be around 400 shares, which have a combined value of approximately €250,000. Some shareholders have as many as 4,000 shares, which would be valued at €2.5m.

What is a share redemption scheme?

The share redemption scheme put forward by the board of Kerry Co-op will allow shareholders to redeem their co-op shares in return for a cash payment.

Kerry Co-op will then cancel these shares.

One share in Kerry Co-op is roughly equal to six shares in Kerry Group plc

The cash value of Kerry Co-op shares will be linked to the current share price of Kerry Group plc as shares in Kerry Group plc are the primary investment of Kerry Co-op.

One share in Kerry Co-op is roughly equal to six shares in Kerry Group plc, meaning the value of a Kerry Co-op share is around €600 based on Kerry Group plc’s share price this week at €103.

If passed at the upcoming AGM, Kerry Co-op will have two windows every year going forward in May and November when the share redemption scheme will be open.