Greencore convenience focus delivers growth

Group first-half sales rise 3.2%
Top line propelled by growth in UK, US food-to-go
Operating profit, net profit rise

Greencore, the Irish food maker, booked an increase in first-half sales and profits thanks to expansion and new customer wins in the UK and US food-to-go markets.

Group sales rose 3.2% to GBP639.8m (US$999.9m) in the six months to 27 March. Food-to-go sales in the UK, a unit of Greencore's convenience business, were up 7%. Convenience sales in the UK overall saw revenues up 4.9%, with prepared meals growing 2.5%.

US sales increased 30.6% including last year's acquisition of convenience store supplier Lettieri's and in spite of temporary supply chain disruption. According to Jeffries analyst Alex Howson, the disruption in the US has put profitability in the market back "a couple of quarters behind initial hopes". However, he added: "Management believe the issue has now been rectified and the mid/long term trajectory remains in tact."

Operating profit before acquisition related costs rose to GBP40.1m from GBP39.2m in the year-ago period. Slightly higher finance costs meant net gains trailed the operating result and net profit edged up to GBP26.9m versus GBP26m.