Greencore targets US revenue growth as costs rise
Greencore, which describes itself as a leading manufacturer of sandwiches and food-to-go products, said it would focus on “delivering new revenue growth” in America, by ensuring food production capacity was fully utilised.
In its trading update, Greencore said it was expecting “inflation” in the cost of raw materials and packaged prices, with labour costs also set to rise for the rest of the year. It added that these overhead costs could be mitigated by purchasing and pricing initiatives.
Greencore results – at a glance
Q1 Revenue: $401.6m ($502m)
Ingredients and property revenue: £15.4m ($19.2m).
US revenue: still pending
Meanwhile, plans to ramp up its US operation come after Greencore completed a $747.5m takeover of Peacock Foods on 30 December – a deal that will quadruple Greencore’s US sales.
Integration of Peacock Foods, a supplier to Tyson Foods and Kraft Heinz, is still in its infancy, but early trading is in line with expectations. Greencore said it would not disclose a detailed commercial agenda for the integrated businesses until May.
US revenue in the 13 weeks to 30 December 2016 was up on a like-for-like basis by 8%. Growth was driven by the addition of operations in Seattle, where Greencore opened a food manufacturing facility in Des Moines, which also doubles up as a research and innovation centre.
The business said it “remains confident” it can deliver a full-year financial performance in line with market expectations.
Greencore appoints non-executive director
Thomas Sampson has been appointed non-executive director with effect from 1 February 2017. Sampson served as CEO of Peacock Foods, recently acquired by Greencore, from 2013 to 2016. Prior to Peacock, Sampson spent 28 years at Kraft Foods in the US.
