What the analysts say - Greencore full-year results

By Michelle Russell | 27 November 2012

Greencore recorded an increase in full-year profits on the back of its acquisitions

Greencore recorded an increase in full-year profits on the back of its acquisitions

Convenience food group Greencore this morning (27 November) saw its share price climb nearly 4% after booking an increase in full-year profits on the back of its acquisition of Marks and Spencer food supplier Uniq last year. Analysts offered positive comments on the group's results.

Shore Capital analyst Darren Shirley

"We believe Greencore's stock is being undervalued by the market, and continue to see the scope for a stock re-rating supported by: A well invested UK business, operating in a market where increasingly homogenous branded price/promotion activity across the big four supermarket chains, has resulted in high-quality private-label ranges becoming an increasingly important point of differentiation for the retail groups."

Investec analyst Nicola Mallard

"Greencore has delivered a strong result from its base business and completed the integration of Uniq, delivering synergies earlier than expected. The environment remains challenging, although Greencore expects to grow at a better rate than the UK grocery market. It should also see improvements in its US returns too. Our forecasts are trimmed modestly to reflect the UK environment, but EPS still show good year-on-year progress of 8%."

Panmure analyst Damian McNeela

"Greencore’s shares have risen by 71% year to date, delivering 69% outperformance compared with the FTSE All Share. Given the company’s strong earnings growth and cash flow generation we continue to believe that Greencore should deserve to trade at a premium to its peer group and reiterate our 'buy' recommendation and 95p price target. We believe Greencore remains well positioned to deliver further revenue growth from key categories of food to go and prepared meals with scope to build on FY 2012 margin performance."

Davy Research analyst Cathal Kenny

"The FY2012 results mark a year of progress for Greencore. The legacy Greencore business delivered 7.7% revenue growth in the period. In the context of a food manufacturing industry that is struggling for volume, this is an excellent performance. Clearly, Greencore is well-positioned in terms of the convenience category with around 60% of revenues in the food-to-go and prepared meals categories, both of which are exhibiting reasonable growth. With the US platform in place to support growth, we expect financial leverage (absolute and relative) to improve from here — Greencore finished the period with GBP258m in debt."

Sectors: Bakery, Chilled foods, Condiments, dressings & sauces, Financials, Private label

Companies: Greencore, Uniq, Marks and Spencer

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