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March 18, 2020

Greencore says too early to predict impact of Covid-19 on results

Ireland-based private-label food manufacturer Greencore has updated the market on the impact the coronavirus outbreak is having on its business.

By Leonie Barrie

Ireland-based private-label food manufacturer Greencore has said its supply chain and production network remains “fully operational” despite the coronavirus outbreak.

But in an update to the market this morning (18 March), the London-listed firm, which supplies convenience foods to many of the UK’s leading retailers, said that “given the level of uncertainty, it is too early to predict the impact of Covid-19 on FY-20 results”.

The group is more than five months into fiscal 2020 and said it is trading broadly in line with original expectations.

In a statement the company said: “Over the last ten days, the impact of Covid-19 has become more pronounced on the wider UK food industry, the grocery sector (to which the group supplies the vast majority of its products) and on Greencore.

“While much is changing across UK society in response to the pandemic, it is apparent that the maintenance of a robust food system – at a manufacturing, distribution and grocery store level – will be an increasingly critical part of the national infrastructure, particularly as footfall reduces in foodservice and hospitality formats.”

Greencore said that, from a demand perspective, volumes are holding up well, “albeit there is a pronounced change in mix across different parts of the product portfolio and across customers’ store formats”.

The company said its cash generation has proceeded broadly in line with plan. “The group retains substantial financial headroom, with significant access to cash and undrawn committed debt facilities and with no maturities in any facilities in the next 18 months”.

CEO Patrick Coveney said: “We have three priorities as we lead our group through the Covid-19 pandemic – keeping our colleagues safe, feeding the UK and protecting our business. The health and safety of our colleagues, customers and business partners is paramount. We are closely monitoring all aspects of our business and are confident that we have the team, customer partnerships and protocols in place to maintain food supply through this uncertain period.”

Greencore is due to report its full-year interim results on 19 May.

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