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Activist fund Oasis Management has become Greencore’s largest shareholder, piling pressure on the UK sandwich maker to speed up its turnaround plan after years of sluggish share-price performance.
The Hong Kong-based fund, which has previously agitated for change at Premier Foods and The Restaurant Group, has upped its 5.1 per cent stake in Greencore to 10 per cent, replacing investor Polaris Capital Management as the company’s largest shareholder, according to regulatory filings.
Oasis has been frustrated that the London-listed company has paid out no dividend since 2020, despite having a lower debt burden than peers such as Premier Foods and Bakkavor Group.
The sandwich maker recently completed a £50mn buyback over two years. At its latest trading update in May the company announced it would return a further £50mn to shareholders over 12 months, starting with a £30mn share buyback, and that the board was considering declaring a dividend.
Since Oasis’s holding in the company became public in March, Greencore’s share price has increased 80 per cent.
Oasis is happy with the company’s management and turnaround plans — which includes letting go of less profitable client contracts, job cuts and increasing efficiency at its plants — but believes these can be carried out quicker, according to a person familiar with the fund’s thinking.
Greencore declined to comment.
At its last trading update in May the company upgraded its profit guidance for the full year to £86-88mn. “The Group’s accelerating financial performance is very encouraging as we focus on driving profitability and returns,” said chief executive Dalton Philips.
As a manufacturer of white label goods, Greencore’s sales volumes have held up better than sales of more expensive branded foods as consumers cut back on pricier items during the cost of living crisis.
Greencore is trying to build back profits after half a decade of poor performance following a botched expansion into the US, and a slump in sales during the pandemic, when consumers cooked at home rather than buying meal deals.
For the half-year to the end of March, the company reported better than expected operating margins, which rose 200 basis points to 3.3 per cent as a result of the efficiency measures. Revenues were as expected, falling 6.4 per cent compared to the year before to £866mn.
Activist Rubric Capital Management also holds a significant stake of more than 5 per cent in Greencore, which it built up in 2022. The New York-based fund has previously conducted campaigns at UK company Mereo Biopharma and US technology firm Xperi.
