UK: Greencore Q1 sales boosted by small-store success

By Hannah Abdulla | 28 January 2014

Greencore says it is on track to deliver FY results in line with market expectations

Greencore says it is on track to deliver FY results in line with market expectations

Greencore's first-quarter 2014 sales have been lifted by its success in smaller-format stores.

The group recorded a like-for-like revenue increase of 9% to GBP320.5m (US $532m) in the three months to December 27.

Its convenience foods division recorded like-for-like revenue growth of 9.1%.

In the UK, like-for-like revenue was 7.2% higher than the previous year and in the US, constant currency revenue was 26.2% more than the previous year which the company noted reflected "the commencement of the Starbucks supply agreement".

The management statement noted "buoyant activity in small stores and in product categories which perform well in these stores, such as food to go", while the larger grocery stores had yet to be impacted by improving economic conditions in the UK.

Greencore added it remained "confident" in its ability to deliver financial performance for the year in line with market expectations.

Show the press release

Greencore Group plc ("the Group") today issues its interim management statement for the period to 28 January 2014. Trading information relates to the 13 weeks trading period to 27 December 2013.

Current Trading The Group recorded revenue of £320.5m for the 13 weeks to 27 December 2013, an increase of 7.2% versus the prior year. On a like for like basis (excluding the desserts activity which was sold to Müller Dairy UK Group in January 2013 and in constant currency), revenue growth was 9.0%.

Convenience Foods The Convenience Foods division recorded revenue of £305.6m, 6.9% higher than in the prior year on a reported basis. On a like for like basis (excluding the desserts activity which was sold to Müller Dairy UK Group in January 2013 and in constant currency), revenue growth was 9.1%.

In the UK, like for like revenue was 7.2% higher than in the prior year. While the overall grocery retail environment remains challenging, the small store format continues to exhibit strong growth aiding our food to go activity. During the period, we invested in significant re-launch activity with several key customers, and we continue to develop a pipeline of future growth opportunities for FY15. Our expectations for input cost inflation remain unchanged at around 3%, with pressure in proteins and dairy.

In the US, constant currency revenue was 26.2% higher than the prior year reflecting the commencement of the Starbucks supply agreement. We continue to develop future innovation and distribution opportunities with our key customers.

Ingredients and Property The Ingredients and Property division, which now represents less than 5% of Group activity, recorded revenue of £14.9m, 13.7% higher than prior year in reported currency and 8.5% higher on a constant currency basis.

Financial Position The Group's financial position remains strong with good headroom within existing debt facilities. As reported in the full year results statement in November 2013, the Group refinanced $65m of maturing US private placement notes in October 2013 with a new eight year maturity.

Outlook The Group remains well positioned as a focused and disciplined convenience foods business in its chosen markets of the UK and US. Economic conditions in the UK are steadily improving. While this improvement has yet to be seen in larger grocery stores, we are seeing more buoyant activity in small stores and in product categories which perform well in these stores, such as food to go.

Greencore has had a good start to the year and we remain confident in our ability to deliver financial performance for the year in line with market expectations1.

Original source: Greencore

Sectors: Chilled foods, Financials, Private label

Companies: Greencore

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