Greencore grows revenue during 'transformational period'

22-May-2017 - Last updated on 23-May-2017 at 11:37 GMT

Greencore CEO Patrick Coveney said its US takeover 'transformed our market'

Food group Greencore reported a 46% rise in group revenue for the first half of the year despite massive changes to its global business, including significant investment.

In its six-month results to 31 March 2017, the company’s EBITDA grew 31.2% to £79.1 million (m) and operating profit rose to £55.3m, a 27.1% increase.

Its net debt increased to £556.6m as at 31 March 2017. This was driven by the purchase of convenience food manufacturer Peacock Foods at the end of 2016 – a move labelled as a “step change in operating scale in the US”. In its results the group said it was “encouraged by the performance, momentum and wider potential of the combined business and, in particular, by the emerging commercial pipeline”.

International divisions

Greencore’s Convenience Foods UK & Ireland division saw revenue increase 16.1% in the period. This was driven by its growing Food to Go business, both through category growth and several new business wins.

In the US, volume was up 9% and value rose 1.5% during the period. These were also attributed to category market growth and new business wins.

Patrick Coveney, chief executive officer, 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.”

In its outlook for the next 12 months, it predicted “challenging trading conditions” in the grocery sector and inflation in raw materials, packaging and labour costs in the UK. It will be focusing on integrating Peacock Foods into its business, as well as completing work on its Northampton, Warrington and Carol Stream sites.

It added that it expected “an overall reduction in the level of business change in the second half of 2017”.