Greencore ‘weathered the storm’, says CEO

Convenience operator Greencore has announced a 4.8% increase in the group’s revenue, to 1.32 billion pounds (1.55 billion euros) for its full year as of September 24, the CEO Patrick Coveney declaring that the group “weathered the storm and came out strong from a difficult period. “.

Adjusted operating profit for the period rose 20% to £ 39m (€ 45.9m), the company said, while second-half adjusted operating margin stood at 5.2%.

The group cited new business wins as one of the main drivers of its recovery, contributing more than a third to pro forma revenue growth of 38% in the fourth quarter, while continuing to support its effort diversification.

“Good progress in rebuilding income”

“After a difficult first half in fiscal 21, we made good progress in rebuilding revenues, cash flow and profitability in the second half of the year and are confident to maintain this positive trajectory during the year to come, especially in the seasonally significant second half of the year, ”said Coveney, who recently announced he will step down as chief executive next year, said in a statement.

“The strong recovery in the UK take-out market, as well as the strong performance of other ready-to-eat food categories, add to this confidence. in line with current market expectations. “

Greencore said the trade to date in 2022 has been “encouraging”, with positive revenue dynamics seen across all aspects of the business.

Inflation of input costs

In terms of input cost inflation, the group said it was “making good progress” in solving this challenge, while also noting that the rate of profit conversion continued to be affected by challenges in the chain. supply and workforce across the industry.

He said he expects to generate a FY22 result “in line with current market expectations”, provided there is no significant return to mobility restrictions or blockages due to the increasing rates of COVID infection.

“With significant free cash flow and a significant reduction in leverage achieved in fiscal year 21, the Group is entering the new fiscal year on a solid financial basis,” added Coveney.

“Greencore has a strong position in the dynamic UK ready meals market and, with demand remaining strong at the start of fiscal 22, is confident in its medium-term outlook. “

Analyst’s point of view

Commenting on the group’s performance, Roland French de Davy said: “Adjusted operating profit was broadly in line with expectations. challenges.

“All other things being equal, the 2022 result is expected to be in line with current expectations (Davy: £ 77.9million) and therefore we do not expect any material changes to our guidance. The suggested return of excess capital to shareholders is remarkable. “

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