The firm announced like-for-like growth in continuing operations of 2.6%, driven by 3.3% growth in food-to-go categories for the period ending 27 September 2019, with the Freshtime acquisition already beginning to bear fruit.
Eoin Tonge, chief financial officer, told Food Manufacture that following the purchase of the business in September, the firm was primed for more activity in this area.
“We’re very happy with the acquisition,” he said. “It is early days to say how it will pan out, but the early signs are very encouraging. The business is performing well and that is obviously always very important when you take on an acquisition – that the company performs as you expected it to.
“It has enabled us to start relationships with new customers and it brings a higher degree of focus on chilled snacks.”
More acquisitions
Tonge added that although the business could operate without acquisitions, more were in offing going forward.
“We have stated that we want to expand in the UK,” he added. “It has helped to build our repertoire in the food-to-go category and we will be looking at other examples in the marketplace.”
Analysts expressed “no surprises” with the firm’s wider performance, citing the recent closure of its US operations as a key factor.
The firm has also seen a reshuffle at management level, with the CEO Peter Haden stepping down at the end of this year – something analysts also factored into the results.
“Continuing revenue growth of 2.6%, with top-line progress in the key food-to-go (F2G) categories up by 3.6% and total sales of £1.45bn were very much in line with our expectations, noting that the group exited cakes, desserts and long-life ready meals, while acquiring the Freshtime business late in the period under review,” said a statement from Shore Capital.
“Group-adjusted EBIT slightly increased by 0.9% to £105.5m, with the EBIT margin up by a healthy 30 basis points to 7.3%, reflecting the aforementioned exit from lower-margin (unprofitable) business and lower year-on-year stranded costs post the USA disposal.”
Difficult conditions
Tonge agreed that the firm had performed well, despite difficult market conditions.
“There has been a lot of change at Greencore over the year,” he told Food Manufacture. “We sold the US business at the end of our financial year and that completed in November 2018.
“Our financial year started at the beginning of October, so although it feels like a million light years ago, it has impacted our financial year and that impacts the numbers.
“If you strip that out and look at how we performed in the core UK business, I think we performed reasonably well in what is a tricky market.”
