Greencore Group plc, a leading manufacturer of convenience food in the UK and US, has issued a trading update covering the 13 weeks to 30 June 2017 (Q3) and the 39 weeks to 30 June 2017.
The firm recorded revenue of £636.5m in the 13 weeks to 30 June 2017, an increase of 76.6% on the prior year on a reported basis and of 11.8% on a pro forma basis. Year to Date, the Group recorded revenue of £1,646.8m, 56.5% ahead of the prior year on a reported basis and 8.8% ahead on a pro forma basis.
The Convenience Foods UK & Ireland division reported Q3 revenue growth of 20.9% to £370.6m, an increase of 15.3% on a pro forma basis. Year to Date, reported growth was 17.8% to £1,056.2m, up 12.2% on a pro forma basis.
The strong growth momentum delivered in the period was driven by the Food to Go business, which accounted for more than 60% of divisional revenue in Q3. Reported revenue grew by 32.6% and pro forma revenue grew by 22.7% in the quarter.
This performance was driven by positive underlying market growth as well as by the delivery of the previously announced business wins with several of the group’s largest customers. Operational disruption relating to the launch of these business wins has reduced in Q3.
At the end of June 2017, the group acquired a sandwich manufacturing facility in West Drayton, near Heathrow. This modest acquisition enables Greencore to add additional high quality manufacturing capacity to meet its food to go growth agenda.
However, Greencore has confirmed plans to close its chilled desserts factory at Evercreech in Somerset by October 2018, with the loss of about 400 jobs.
In the other parts of the Convenience Foods UK & Ireland division (which include the Prepared Meals and Grocery set of businesses in the UK, and the edible oils and molasses trading businesses in Ireland), reported revenue grew by 6.4% in Q3, and by 5.3% on a pro forma basis, with particularly strong revenue growth in our Irish ingredients businesses. Trading conditions were challenging in our ready meals, cakes and desserts businesses during the quarter.
The Convenience Foods US division reported Q3 revenue growth of 393.3% to £265.9m, an increase of 6.6% on a pro forma basis. Year to Date, reported growth was 280.5% to £590.6m, up 3.9% on a pro forma basis. Reported revenue growth primarily reflects the acquisition of Peacock Foods at the end of December 2016.