Greencore, the maker of convenience food for the likes of Aldi, M&S, and Tesco, has signalled that profits during its current financial year will reach their pre-pandemic peak after posting forecast-topping annual results.
The Ireland-headquartered firm expects its adjusted operating profit to come in at the “top half of the range of current market expectations”, pointing to a figure between £102.5m and £107m. Chief Executive Dalton Philips has long targeted profits reaching their pre-pandemic level of £105m by 2026.
Over the year to 27 September 2024, Greencore’s adjusted operating profit surged up a better-than-expected 27.8% to £97.5m, with “proactive management” of contract profitability driving a 140bps margin improvement to 5.4%
Greencore’s revenues fell by 5.6% to £1.81m, driven by the sale of its former edible oils business Trilby Trading and the decision to exit several low-profit contracts. However, like-for-like sales rose by 3.4%, with the group noting that it saw volume growth ahead of the wider market, driven by a strong performance in key categories and contract renewals.
“The group delivered excellent progress against its key financial metrics and strategic priorities in financial year 2024, underpinned by close customer engagement in a period that continued to be defined by cost inflation and muted consumer confidence,” said Philips.
“Over the last 12 months, we have remained focused on making high-quality food, rebuilding our profitability, and positioning Greencore to be known as the UK’s leading convenience foods manufacturer. We continue to make progress against each of our strategic objectives and are well positioned to continue this momentum in financial year 2025 and over the longer term.”
The company highlighted that it was being mindful of the “significant labour cost headwind” announced in the UK Budget but was encouraged by its current underlying momentum. Greencore said it plans to offset the additional labour costs fully via further efficiency initiatives alongside “usual inflation recovery measures”.
