Greencore US sales could hit €625m in three years

Greencore’s US operations could have the capacity to generate annual revenues of $600m to $700m (€540m to €625m) within three years.

The convenience food group yesterday reported a near 4% year-on-year increase in first half revenue to £639.8m, with operating profit rising by nearly 8% to £40.1m and pre-tax profits — for the six months to the end of March — jumping from £8m to £26.3m.

While growth was driven mainly by its UK operations, Greencore’s US division saw first-half net revenues increase 30%, on a year-on-year basis, and by 15% in like-for-like terms.

Greencore chief executive Patrick Coveney said revenue capacity in the US will grow significantly once new facilities on the east and west coasts (at Rhode Island and Seattle) are up and running.

He said while management is happy with clientele in the US — where Greencore sells to the Starbucks and 7-Eleven chains — the group could look to increase its customer base in the coming years, with it also expecting to grow to other areas down the line.

Mr Coveney didn’t rule out the prospect of Greencore making more acquisitions in the US, although no deals are in the pipeline.

Greencore’s convenience food operations increased first-half revenues 4.9% to £614.7m, while operating profit was ahead 9.5% to £39.3m.

While the food-to-go market is Greencore’s chief growth segment, its prepared ready meals business increased sales 2.4%.

This included Italian ready meals, signifying a complete recovery from the horsemeat scandal of a couple of years ago. Mr Coveney said good financial and strategic progress had been made in the first half of the financial year.

“Our strategy of deepening our leadership, capability, ‘capacity footprint’ and customer partnerships in the UK and US food-to-go markets continues to deliver growth.”

“The group has stepped up its capital investment programme in new sites, which will provide a solid platform for growth.

“We carry good momentum into the second half and remain confident in our ability to deliver adjusted earnings per share growth for the year in line with market expectations,” he said.