The end of the sugar era will hit earnings. Greencore's sugar business contributed 25m last year, and Goodbody's Liam Igoe said exiting the business will reduce earnings per share by 20% in a full year. The extent to which the loss of sugar earnings will hit the company's overall turnover will depend on how well Greencore can drive its convenience food business.

Greencore generated 65% of its operating profit from convenience food in 2005.

Now that the company is free to focus on its sandwich and ready meal divisions, it would be reasonable to expect improved performance. The division has had its troubles in recent times. Greencore offloaded its struggling chilled pizza business in the UK last year, taking a 40m hit in the process.

Dolmen Stockbrokers' head of research Stuart Draper said there is an obvious upside to exiting the sugar business. "Its good to be beyond it and be able to close it and move on and focus on their core business.

Greencore management may not be the only ones taking a hard look at that business.

In a research note on the company, NCB analyst Paul Meade speculates that the end of the company's involvement in sugar production makes it a potential acquisition target.

But he pours cold water on any thoughts that shareholders could stand to benefit from a hefty takeover premium.

The current price of 3.60 reflects Greencore's potential to be absorbed by any consolidation play in the sector, he said, unless its property disposal nets more than 100m. Even assuming a 100m gain on property disposal, Greencore is trading on a multiple of just under 12 times 2007 earnings, Meade notes, "relative to a sector multiple of 9.9 times".

Of more immediate concern to investors is the process of exiting the sugar business. Greencore estimates the total cost of doing so at 168m. On the plus side, the company stands to benefit to the tune of 131m from an EU restructuring fund set up to ease the burden on sugar producers winding down their operation.

Greencore believes, based on legal advice, that it is entitled to 90% of the 146m in restructuring funds allocated to Ireland, and that the remaining 10% would be payable to the country's various sugar growers.

NCB's Meade cautions that Greencore's assumption may be slightly optimistic, given the anger felt by Irish sugar beet farmers at the company's decision to cease production. "Litigation is likely as growers seek to increase their take from the compensation payment."

Merrion's Robert Brisbourne said the conditions attached to the EU fund allow the government to exercise discretion in disbursing the money, though he expects Greencore to receive over 100m in any event.

Greencore is also likely to benefit handsomely from selling the Mallow and Carlow sites associated with its sugar business. The company gave no sign of what its intentions are but analysts believe a disposal is inevitable.

Davy analyst John O'Reilly estimates that Greencore could realise over 100m from selling the two sites.

That would leave its "net cash proceeds" from exiting the sugar business in the 150m 200m range.

HORIZON RIDE OUT THE MARKET DOWNTURN

MANAGEMENT at Horizon Technology have done as good a job as any IT firm to help the company ride out the downturn. Investors are now betting on an upswing in corporate spending on technology in the UK and Ireland to drive share price growth.

The consensus seems to be that the company has done all it can to tack through the doldrums, but the question now is when Horizon will catch a gust and how far the winds will take the company.

Results last week threw up some positives. The company grew revenue by 4.6% to 294m, a reasonable performance in what is generally considered a very challenging market.

Goodbody Stockbrokers' Gerry Hennigan noted that Horizon has outperformed its UK peers. At 1.23, Horizon shares are valued at a multiple of 11.7 times the company's 2006 earnings forecast which, said Hennigan, is a discount to rivals such as Computacenter.

Horizon's turnover from its distribution business fell off slightly, but this was balanced by increased revenue from its enterprise solutions business, which supplies IT services to large corporate clients.