Greencore revenue up despite controversy

Greencore’s annual results have exceeded market expectations, despite this year’s horsemeat scandal wiping about £15m from its full-year revenues.

While analysts had expected a slight drop in group revenues for the year to the end of September, Greencore yesterday reported a 3% increase to almost £1.2bn, (€1.43bn) with operating profit ahead by over 8% at £76.5m, on a pre-exceptional basis.

Adjusted pre-tax profits were up by nearly 12% at £61.6m, with adjusted earnings per share climbing more than 13% to 14.5p. Progress was also made on denting the group’s pension deficit and net debt levels.

Chief executive, Patrick Coveney said that clear progress had been delivered and the group had a good year. He added that the group was “modestly ahead” of consensus on revenue and operating profit and “decently ahead” on earnings per share.

In its core convenience foods unit, Greencore saw revenue rise by 3.5% to £1.13m and operating profit increase by 7% to £73.9m. Despite challenging trading conditions in the UK, the group’s ‘Food to Go’ business there (which represents 40% of the convenience food division’s revenues) recovered from a slow first half to show good growth for the year.

Despite the recent slowdown in Britain, Mr Coveney said that “good momentum” in the fourth quarter has been continued into the current financial year and management expects to see growth in the UK this year.

Revenue in the US — viewed as being a key long-term growth source for the group — jumped by 60%, aided by acquisitions and product distribution deals with the likes of Starbucks and 7-Eleven.

Mr Coveney also said he remains positive regarding the smaller prepared meals division — which was directly hit by the horsemeat scandal.

Though only a marginal revenue generator, growth (albeit on a slow basis) is anticipated, with consumption of non-beef related ready meals leading management to suggest a pick-up can occur in line with improved animal testing and substantial changes to supply chains.


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