Resilient Performance From Refocused Greencore

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Resilient Performance From Refocused Greencore

Resilient Performance From Refocused Greencore
November 26
12:55 2019

Now refocused on its UK convenience foods operations following the $1.075 billion (£817 million) sale of its US business, Greencore has reported a 3.5% decline in revenue from continuing operations to £1.446 billion for the year ending 27 September 2019, primarily reflecting the impact of site disposals and closures as the group exited the UK cakes and desserts sector and shut its longer life ready meals facility at Kiveton. However, despite a subdued UK trading environment, especially in the second half of the year, with cautious consumer demand particularly prompted by the uncertainty around Brexit, Greencore delivered pro forma revenue growth of 2.6%, increased adjusted operating profit by 0.9% to £105.5 million and improved adjusted operating margin by 30bps to 7.3%.

Revenues from Greencore’s food to go categories (comprising sandwiches, salads, sushi and chilled snacking) totalled £962.5 million and accounted for approximately 66% of group revenue. Reported revenues grew by 3.6% in these categories, aided by a contribution from the £56.0 million acquisition of Freshtime in September 2019 that extended Greencore’s presence in meal salads and chilled snacking.

Patrick Coveney, chief executive of Greencore.

The group’s other convenience categories comprise activities in the chilled ready meals, chilled soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire Pudding categories, as well as Irish ingredients trading businesses in Ireland. Reported revenue across these businesses declined by 15.0% to £483.6 million. Pro forma revenue increased by 1.2%, when excluding sites that were either sold or ceased trading.

Patrick Coveney, chief executive of Greencore, comments: “Over the past twelve months we have fundamentally reset our business, anchored by a clear strategy to drive shareholder value by expanding our category and channel capabilities within the diverse, growing and attractive UK food to go market. The evidence of this can be seen in the launch of multiple commercial and innovation projects with key customers, and in the recent acquisition of Freshtime. As a result of this reset strategy, we anticipate another year of profitable growth in FY20.”

Greencore has entered its 2020 financial year with a clear set of strategic objectives – to drive growth in an expanding food to go market, to deepen its relevance with customers, and to adopt a distinctive and repeatable Greencore Way of working. These are underpinned by an economic model of disciplined growth and investment.

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