Shares in Greencore soared over 18% this morning after the convenience food manufacturer reported a big increase in interim profits and upped its annual guidance.
Over the six months to 29 March, the firm’s adjusted operating profit climbed 139.8% to £28.3m. It is now forecast to be in the range of £86-88m for the year – ahead of market expectations.
Total revenues were up 6.4% to £866.1m after Greencore exited a number of low-margin contracts and sold off its Trilby Trading business. On a like-for-like basis, growth was 4.1%.
The Dublin-headquartered company, which is the biggest pre-packed sandwich maker in the UK, noted that with the exception of labour costs, inflation in its main cost components had slowed and the majority incurred was recovered or mitigated in the period. It highlighted that efficiency initiatives also supported the offsetting, recovery and mitigation of labour, fixed cost and other overhead cost inflation.
Dalton Philips, Greencore’s Chief Executive, stated that the company delivered excellent progress against its strategic priorities in the first half and continued to outperform the market in a difficult consumer spending environment.
He added: “The group’s accelerating financial performance is very encouraging as we focus on driving profitability and returns. We are working with our major retail customers to develop new products and new offerings which are driving the growth of our Food to Go segment ahead of the market.
“We have exited low-margin business and are undertaking a range of actions to increase the returns profile of each element of the portfolio. We have many opportunities to continue to grow our business profitability and have commenced investing in our IT infrastructure to create a solid platform for growth and enable further efficiency gains across the group.”
