Greencore claims "strong" H1 sales, profit growth - Just Food
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Greencore claims “strong” H1 sales, profit growth

23 May 2017

Ireland-based convenience food group Greencore today (23 May) touted "strong" growth in sales and profits during the first half of its financial year.

Greencore claims “strong” H1 sales, profit growth

Ireland-based convenience food group Greencore today (23 May) touted “strong” growth in sales and profits during the first half of its financial year.

The sandwiches-to-sushi supplier booked a net profit of GBP10.4m (US$13.5m) for the six months to the end of March, down from GBP19.9m a year ago.

However, the reported net profit included exceptional charges of GBP20.5m, incurred due to costs linked to the purchase of US group Peacock Foods last year, as well as the integration of the business and of another acquisition, UK firm The Sandwich Factory. Greencore posted an underlying net profit of GBP30.9m, versus a comparative figure of GBP25.6m in the first half of its previous financial year.

On a reported basis, Greencore’s revenue jumped 46.1% to GBP1.01bn, in part due to the impact of its acquisitions of The Sandwich Factory and Peacock Foods last year.

On a pro-forma basis, which adjusts reported revenue to reflect if The Sandwich Factory and Peacock Foods were owned in the first halves of both the financial years under review, Greencore’s revenue rose 7.3%.

In the wake of the purchase of Peacock Foods, Greencore has made changes to the way it presents its results, providing revenue and operating profit for two divisions – convenience foods in the UK and Ireland, as well as convenience foods in the US.

The company said its UK and Irish business saw its revenue rise 16.1% on a reported basis to GBP685.7m and by 10.6% on a pro-forma basis on the back of “several new business wins”.

The operating profit from the division inched up from GBP46.7m to GBP46.8m. Greencore pointed to the investment it had made in “significant commercial launches” and “challenging market conditions” for its businesses outside the food-to-go sector.

In the US, Greencore tripled its reported revenue to GBP324.6m due to the Peacock Foods deal. On a pro-forma basis, revenues rose 2.5%, dampened by deflation in commodity costs. Greencore said volume growth was “strong” at 9%.

The US reported an operating profit of GBP8.5m, versus an operating loss of GBP3.2m a year earlier.

Greencore CEO Patrick Coveney said: “This has been a transformational period for Greencore following the acquisition and integration of Peacock Foods in the US. Against a backdrop of considerable change across the group, we are pleased to be reporting strong revenue and profit growth for the first half of the year.

“In the UK, we have delivered significant expansion and investment following recent new long-term business wins, as our food-to-go business continues to grow rapidly. In the US, the addition of Peacock Foods has transformed our market and channel position and has given us a growth platform of real scale. The enhanced capabilities, product offerings, and customer relationships that have been added to the group in a short space of time, combined with the strength of our underlying business, mean that we are confident of making further progress in FY17 and beyond.”

Shares in Greencore were up 6.69% at 242.5p at 08:50 BST.

How Greencore is aiming to be a national player in the US – just-food analysis on Peacock Foods deal from November 2016