UK and Republic of Ireland sales increased 16.1% to £685.7M over the 26 weeks to March 31, Greencore reported today (May 23). Food-to-go sales were up 19.7% across the period, it added.
Group operating profit was up 27.1% to £55.3M, while group earnings before interest, taxes, depreciation and amortisation increased 31.2% to £79.1M.
US sales were up 220.8% to £324.6M, following its acquisition of Peacock Foods in December, Greencore said.
‘Transformational period of Greencore’
Greencore ceo Patrick Coveney said: “This has been a transformational period for Greencore following the acquisition and integration of Peacock Foods in the US. Against a backdrop of considerable change across the group, we are pleased to be reporting strong revenue and profit growth for the first half of the year.
“In the UK, we have delivered significant expansion and investment following recent new long-term business wins, as our food-to-go business continues to grow rapidly. In the US, the addition of Peacock Foods has transformed our market and channel position and has given us a growth platform of real scale.”
‘Rising raw material costs’
Greencore’s revenue was boosted by significant capacity additions and commercial launches with key customers across the 26 weeks. It had also offset rising raw material costs, packaging and labour, the manufacturer said.
The US expansion provided Greencore with “enhanced capabilities, product offerings, and customer relationships”, Coveney said. That meant it was confident of further progress in the second half of the year, and beyond, he added.
Meanwhile, last month Greencore shares dropped about 7.5% in value within three hours, after its largest customer, Tyson Foods, revealed a £2.5bn takeover of convenience foods manufacturer AdvancePierre Foods.
What the analysts say about Greencore’s results
- “We remain of the view that Greencore will be a winner in the UK food manufacturing arena with its focus on the food-to-go market. We also believe the Peacock acquisition will transform the group’s long-term prospects in North America from a previously subscale position.”
Darren Shirley, Shore Capital