Greencore sales slip, but revenue rises 3%

Greencore has reported a near 3% year-on-year rise in third quarter group revenues, despite lowering sales in its core UK operations.

The Dublin-headquartered food giant said yesterday that trading in the three months to the end of June was in line with expectations, with revenues of £305.8m (€350.5m), 2.6% up on the same period last year.

Its main convenience foods division recorded a 2.8% annualised sales rise to £285.7m, with growth reflecting both acquisition contribution and the impact of exited business lines.

However, market conditions in its main market of the UK “remained tough”, with poor weather affecting business for much of the period. Greencore’s UK revenues were down by 1.3%, year-on-year, excluding acquisition contribution.

Management said the overall chilled ready meals market is “gradually” recovering from the horsemeat scandal — which knocked around €7m off Greencore’s first half revenues — but certain areas, such as Italian ready meals, have remained in decline.

Greencore’s ingredients and property division generated third quarter revenues of £20.1m, in line on a year-on-year basis in reported currency terms, but down by 3.6% on a constant currency basis.

In the US, however, Greencore saw annualised revenue growth of over 50%, largely driven by the start of its supply contract with Starbucks and its acquisitions of sandwich and snack makers MarketFare Foods and Schau.

Last month, Davy Stockbrokers upgraded its long-held “neutral” rating on the Greencore stock, to “outperform”.

Greencore said that it still expects trading conditions to remain “challenging” in the near-term, in the UK, but it remains confident of meeting its earnings expectations for the full year.

In the first nine months of its financial year, Greencore said revenue is ahead by 1.5% at just under £879m.