Experts said they were encouraged by the firm’s progress since the acquisition in October last year. They reserved particular praise for its convenience food performance, which was described as “excellent”.
Clive Black, an analyst at Shore Capital, said: “London-listed from January 20, Greencore has delivered its first update for the 2011/12 financial year. It is the most comprehensive report to date on the group’s progress with the October 2011 acquisition of Uniq.
“We are encouraged by Greencore’s progress and the sales performance in the core convenience foods division could be called excellent to our minds, with revenues in the Greencore business excluding Uniq activities up by 13%.”
Uniq activities
Black confirmed the Uniq activities that Greencore intended to retain reported sales growth of 8.2% for the period ending January 27. The combined sales performance resulted in continuing operations delivering revenues of £336M, an increase of 11.2%.
There was, however, a decline in revenues of 18% for parts of the Uniq business that Greencore intends to exit, according to Black. This was “anticipated”, however, after the firm announced it expected to have exited these activities by June.
Total group revenues rose 52.6% to £375.4M for the period. The firm’s convenience foods division reported sales of £353.8, an increase of 57.2% from the previous year.
The ingredients business also saw revenues increase by 3.2% to £21.6M for the period.
Integration
“The integration of the Uniq business continues to progress in line with our plans,” a Greencore statement revealed.
“The Northampton sandwiches business is operating as a separate category business within the UK convenience business. The Spalding salads business has been fully integrated in to the Greencore food-to-go category, where we have a common customer set."
Greencore confirmed that the chilled desserts division was being operated as a single category business. This coincided with the downsizing of its Minsterley dairy and product transfers to its Evercreech site, according to the firm.
Black warned that, despite the firm’s encouraging start to the year, he expected a slight decrease in revenues for the second quarter.
But he stressed that he did not expect “considerable” operational changes at the multiples to affect Greencore in the long-run.
He said: “We are keeping our feet on the ground at this juncture with respect to the full year out-turn. Morrisons and Tesco UK are expected to make considerable changes to their operating channels in future years. But we are not expecting a UK retail price war and much of the investment by the supermarkets is in store and not in price.
“It is also important to point out that Greencore had more favourable trading conditions for December 2010 and January 2011 that assist the recent performance. Hence, we would expect a modest deceleration in trading momentum in the next quarter.”
Meanwhile, Greencore announced yesterday that it was switching its currency denomination from euros to sterling as it pushes for inclusion on the FTSE UK series.
City analysts confirmed that the decision was likely to add value to the business in the eyes of potential investors.