Greencore has reported higher sales in the first half

Greencore has reported higher sales in the first half

Growing demand for on-the-go foods in the US and UK led Greencore to deliver higher sales in the first half of its financial year.

For the six months ending 25 March, sales on a reported basis increased 8.1% to GBP691.6m (US$1bn). On a constant-currency basis, sales were up 7.5%.

Greencore reported sales growth across all four of its divisions and said it has seen "continued strong momentum across UK and US food to go activity".

Profits rose in the half. The group posted an operating profit of 8.5% to GBP43.5m.

Profit for the period on an adjusted basis was up 8.8% to GBP26.2m. On a non-adjusted basis, which included costs from Greencore's exit from two facilities in the US and the opening of a site in the market and in the UK, profits were GBP20.5 compared with GBP26m a year earlier.

Darren Shirley, analyst at Shore Capital, said Greencore had delivered results "very much in-line with our expectations". He also applauded the group on "encouraging" sales growth.

Martin Deboo, analyst at Jefferies, however, warned Greencore's growth in the UK could be slower in the second half as the company "laps the build on new contract volume in sandwiches".

Greencore's H1 performance by division

  • Food to go (sandwiches, salads and sushi): Sales +13.1%. "Strong outperformance" of the market driven by product relaunches with key customers together with  the annualisation of recent business wins.
  • ?Prepared Meals (ready meals, quiche, chilled soup and sauces):  Sales up 1.6% with growth in ready meals and quiche "ahead of relevant product market driven by successful activity with a key customer". 
  • Grocery (cooking sauces, table sauces, pickles, Yorkshire Puddings, cakes and chilled desserts): Sales up 1.7%, driven by cakes and desserts. Overall revenue in cooking sauces and Yorkshire Puddings was marginally lower than in the prior year, reflecting continued price deflation.
  • US Convenience Foods (on-the-go food products for convenience and small-store foodservice channels): Sales +17.3%. Underlying growth with two principal customers of the business was "very strong", while overall revenue with other customers was lower year on year.