Confident Greencore eyes further US expansion

Greencore is confident of adding to its customer base in the US — where it currently provides food products to the likes of Starbucks and 7-Eleven — on the back of growing capacity there.

Greencore’s management views last year’s near €700m acquisition of Peacock Foods — which significantly enhances its branded goods and distribution capacity — as being “transformational” allowing it to quadruple its US revenue base.

Chief executive Patrick Coveney identified the addition of new customers [in the US] “on the back of our enlarged footprint and capability” as a prime growth opportunity when he reviewed Greencore’s latest quarterly performance with analysts yesterday. The Dublin-based convenience food group is confident it will meet its earnings targets for the 12 months to the end of September after posting a strong third-quarter update.

On a group-wide basis, Greencore reported revenue of £636.5m (€714m) for the quarter, up 76.6% year-on-year on a reported basis. Despite the continued challenging market conditions, its UK and Ireland division posted revenues of £370.6m, nearly 21% higher than the same period last year.

Trading was challenging in the ready meals, cakes, and desserts segment, but growth was driven by Greencore’s food-to-go offering, with “particularly strong revenue growth” in the Irish ingredients business. The US convenience foods business recorded revenues of £265.9m, 6.6% up on a pro-forma basis. The UK food-to-go business has also received a boost with the acquisition of a sandwich manufacturing facility near Heathrow Airport, which will boost Greencore’s manufacturing capacity.

Greencore’s shares — down nearly 6% this year — were marginally up yesterday. Analyst reaction to its latest update was generally upbeat, though Davy warned of a “modest” downward revision to its full-year forecasts, due to challenges facing the non-UK food-to-go business.


More in this Section

Doubts Donald Trump’s growth spurt can be sustained


Breaking Stories

European stocks fall as Turkey fears heighten

Investors not sold on Air France boss

Greece not out of the woods

Eurozone borrowing demand set to increase, says ECB

More From The Irish Examiner