Greencore’s food-to-go strategy ‘is working well’

By Michael Stones

- Last updated on GMT

Greencore ceo Patrick Coveney
Greencore ceo Patrick Coveney

Related tags Futures contract Inflation Profit Uk Greencore

Greencore’s food-to-go strategy is working well, both at home and in the US, claims ceo Patrick Coveney, as the manufacturer posted half-year group revenue up by 7.5% to £691.6M.

The firm’s group operating profit rose by 8.5% to £43.5M in six-month results to March 25 2016, posted today (May 17). Group operating margin remained unchanged at 6.3%.

Greencore ceo Patrick Coveney said: “Greencore has performed strongly in the first half of the year. Our strategy of focusing on the UK and US food-to-go markets is working well and we are continuing to invest in capacity and capability initiatives to support the substantial future growth pipeline.”

Ahead of the underlying market

The manufacturer’s chief financial officer, Alan Williams, told Greencore’s food to go business in the UK grew at 13.1% – well ahead of the underlying market.

The expansion of the firm’s Northampton site was continuing, with the first of four production units now in operation.  

“Two years ago, we were predicted about £60M of incremental revenue for the group arising from the Northampton expansion,​said Williams. “The business wins now look like £75M of incremental revenue.”

Discount chain

In the UK Greencore, food to go sales were benefiting from two new deals – one to supply a petrol forecourt retailer and a second to supply an unnamed discount chain, added Williams. Greencore now supplied two discount chains.

Food to go, comprising sandwiches, sushi and salads, grew by 13.1% in the period and accounted for 40% of UK revenue.

But the UK grocery market remained challenging, complicated by organisational change for the firm’s customers and net price deflation. Nevertheless, all three divisions – Food to go, Prepared Meals and Grocery – showed volume and revenue growth in the first half of its current financial year. 

Meanwhile, Greencore’s group technical director Helen Sisson contributed recently to the Food Manufacture Group’s free, one-hour webinar, with Marks & Spencer’s head of responsible sourcing and packaging and Plan A Louise Nicholls and others.

Once registered​, you can listen to the webinar at any time and for any number of times for the next few months.

Greencore first-half results – at a glance

• Group revenue of £691.6M, up 7.5% in constant currency

• Convenience Foods revenue of £667.9M, up 7.8% in constant currency

• Group operating profit up 8.5% to £43.5M

• Group operating margin of 6.3%, unchanged

• Interim dividend of 2.55p per share, an increase of 6.25% 

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