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MARKET REPORT: Sandwich maker Greencore struggles to earn a crust

A firm desperately in need of offices to reopen is sandwich maker Greencore.

The FTSE 250 company, which makes sandwiches for Marks & Spencer, Sainsbury’s and Asda, has had a rotten time since coronavirus struck.

Like Pret a Manger and Eat, the company relies heavily on lunchtime trade when office staff pop out to buy sandwiches.

Lunch crunch: Greencore which makes sandwiches for Marks & Spencer, Sainsbury’s and Asda, has had a rotten time since coronavirus struck

But chief executives have been slow to get their workers back in and fears are that things could stay that way.

This week, accountant EY said staff will work from home for two days a week for good. Rival BDO went further, telling staff to stay at home forever if they wish.

Only investment banks have put their foot down, with Goldman Sachs and JP Morgan telling staff to come in. Charles Hall, analyst at Peel Hunt, said: ‘The current situation is pretty unhelpful. More unemployment in the UK is also a worry for Greencore.’

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Sales have plunged during the pandemic, necessitating a turnaround plan.

It came a day after it pushed back publication of its full-year results from tomorrow to June 10.

Shares fell 1.6pc, or 2.8p, to close at 177.2p.

The stock peaked at close to 2900p in 2015 but is up nearly 50 per cent so far this year. 

The pandemic has been the latest blow for a retailer hit by multiple profit warnings, several management changes and an accounting scandal.  

Greencore had to close its Northampton factory in August when almost 300 workers tested positive for Covid-19.

The closure did not affect performance but shows the rum luck the Dublin firm has had. Figures for the first six months this year show revenues slid 19 per cent to £577million and it swung to a £1.8million loss.

Shares fell 15.7 per cent, or 26.8p, to 144p, valuing it at just £899million.

Interestingly Hall doesn’t rule out a possible private equity bid, should the company’s valuation move much lower.

Property firm Shaftesbury will have done little to raise Greencore hopes. The company, which owns offices in London’s West End, posted a £339million six-month loss, and collected just 43 per cent of rent due from its office tenants. 

Shares fell 1.8 per cent, or 10.5p, to 588p. Another day and another private equity takeover as Telit Communications succumbed to £307million offer from DBay Advisors.

An all too familiar sight during the pandemic, Telit shares were up 11.4 per cent, or 23p, at 225p.

The FTSE 100 index made a small loss, down 0.31 per cent, or 21.8 points, to 7029.79.

Smurfit Kappa was a top riser after the Irish packaging giant invested £17million to expand capacity at four plants across the Czech Republic and Slovakia. Shares were up 1.5 per cent, or 57p, at 3817p.

But engineering and industrial companies were having mixed fortunes yesterday.

Andy Reynolds Smith surprisingly left Smiths Group. The company has appointed former 3M man Paul Keel as its new boss. 

He will receive an annual salary of £875,000 with bonuses up to 180 per cent of that figure. But investors were unsure and shares in Smiths dipped 1.1 per cent, or 16.5p, to 1543p.

Aveva was on the rise after it posted revenue of £820million for the year to the end of March – a decrease of 1.6 per cent but in line with expectations. Shares climbed 1.6 per cent, or 53p, to 3328p.

It was a difficult session for commodity giants Glencore and Rio Tinto. Prices for steel and iron ore have retreated 20 per cent over the past ten days.

Glencore was down 2.1 per cent, or 6.4p, to 3035p and Rio lost 1.5 per cent, or 87p, to finish at 5905p.

Other notable risers included Royal Mail, which is due to charge back into the FTSE 100 after its shares roared 300 per cent higher during the pandemic.

They rose another 6.6 per cent, or 36.2p, to 586.2p and are now touching three-year highs.

Cineworld was also making hay for the second consecutive session, as film fans head back to the big screen. 

Hopes are for a bumper summer ahead, boosted by releases including Cruella. Shares climbed 4.8 per cent, or 4.28p, to 93.88p.

Restaurant Group says it is starting to head in the right direction, with sales at pre-pandemic levels. Investors weren’t so sure and the Wagamama owner fell by 2 per cent, or 2.6p, to finish at 125.8p.

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