Greencore Group reports strong third quarter growth
For the 13 weeks to June 29 overall sales were up 46.9% compared with the same period a year ago, having been boosted by the acquisition of the former Uniq business, and MarketFare Foods in the US from April 18.
However, excluding the contribution of MarkeFare and adjusting the figures to take account of other business that has been or will be exited, the company still achieved growth of 6.8% for the quarter across its continuing business.
On a year-to-date basis, sales for the 39 weeks to June 29 were £865.5M, up 48.8% on the same period a year ago, and showing core growth of 8.3% excluding the contribution from Marketplace.
Underlying growth
For the third quarter, the Convenience Foods division achieved sales of £277.9M, up 51.2% on the previous year, and the core Greencore business was 6.6% up. Underlying growth in the former Uniq business was 7.3%.
The company reported that performance during the third quarter had been affected by poor weather and by the Diamond Jubilee celebrations. It said: “We experienced strong performance in May in the run-up to the Jubilee bank holiday helped by some good weather, whereas demand in June was impacted by inclement weather conditions.”
Clive Black, analyst with Shore Capital, described the statement as “strong”, and said: “We had harboured reservations that the very inclement weather in the UK and the tough trading conditions that the British supermarkets are demonstrably experiencing may have negatively impacted Greencore’s trading momentum more than it has.”
Highly commendable
He added: “While there has been an understandable deceleration in trading momentum in the third quarter, that the Convenience business has delivered 6.8% underlying sales growth in its continuing business is highly commendable.”
Nicola Mallard, analyst with Investec, said: “Greencore’s third quarter trading update continues to show very good progress, despite more challenging grocery headwinds.”
She added: “Greencore has continued to strongly outperform the wider Grocery market, delivering organic growth of 6.7% in its third quarter, and this was despite some dampening effect from the climate in a literal and economic sense.
“The core convenience business showed a 6.8% revenue advance, which was well balanced, with legacy Greencore +6.6% ahead and Uniq, excluding discontinued business, up 7.3%. The ingredients businesses also reported a steady 5.1% growth.”
