Convenience food group Greencore has booked an increase in first-half earnings but warned about “tough” UK market conditions for the remainder of the year.
In the six months ended 29 April, net profit was up 18.3% to GBP22m (US$33.5m), the group reported today (21 May).
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Greencore said growth rates in its core catergories in the UK were lower than in the prior year, even before the impact of the horsemeat scandal on the ready meals sector.
However, group operating profit for the six-month period rose by 6.3% to GBP33.7m. Adjusted pre-tax profits, which excluded costs like pension finance items and M&A-related amortisation, were up 9.9% at GBP26.5m.
The company recorded sales of GBP572.9m, up 0.9% on last year. Convenience foods revenue increased 1.8% to GBP542.1m; the remaining of Greencore’s business in in ingredients and property.
The UK accounts for the bulk of Greencore’s convenience food sales although the company is building a business in the US, where it said sales doubled in the first half after M&A.
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By GlobalDataLooking ahead, Greencore said it expects market conditions to remain tough during fiscal 2013. The UK market shows “little or no volume growth”, the company said. The country’s ready meals category, which represents around 15% of group revenue, is still to recover fully from the horsemeat scandal.
However, the company said it is “strategically well-positioned to confront these challenges” given its “balanced” customer portfolio and exposure to faster growing convenience categories.
“With the tight financial controls we have in place, we remain confident in our ability to deliver adjusted EPS growth for the financial year in line with expectations,” Greencore said.
Shares in Greencore were up 0.64% at 118.75p at 08:24 BST.
Click here to view the full earnings release.
