UK convenience food manufacturer, Greencore, which has its headquarters in Dublin, saw a drop in revenue for the first quarter of the 2024 financial year.
Its latest financial results show that group revenue decreased by 4.7% to £441.3 million.
The report states: “On a Pro Forma basis, adjusting for the disposal of Trilby Trading Ltd. in Ireland, revenue was broadly flat year-on-year.
“On a like-for-like [LFL] basis, revenue increased 5.8% year-on-year,” Greencore has said.
According to the results, total manufactured volumes for the quarter declined 4.8%, due to the proactive decision to exit a number of contracts that were delivering sub-optimal returns.
Food manufacturer
In Q1, reported revenue in ‘food to go’ categories increased 0.9% to £293.7 million, and on a LFL basis this was an increase of 5.8%.
According to Greencore, the LFL increase was primarily due to an increase in LFL manufactured volumes of 0.6% and inflation recovery initiatives.
Total ‘food to go’ manufactured volumes, including exited contracts, declined 2.9%.
Overall sandwich volumes increased 3% on a LFL basis versus a flat year-on-year market performance.
Reported revenue in other convenience categories was £147.6 million, a 14.2% decrease year-on-year.
Overall chilled ready meals volumes increased 2% on a LFL basis versus a 2% market decline.
Greencore appointments
Catherine Gubbins will join the business on February 6, 2024, following her appointment as executive director and chief financial officer.
Jonathan Solesbury will remain with the group until the end of May 2024 to ensure a smooth transition according to the company.
In Q1, the group refinanced its debt facilities with a new five-year £350 million sustainability linked revolving credit facility (RCF), maturing in November 2028 with the option to extend for up to a further two years.
The facility also includes a £100 million accordion option. This new facility replaces the existing £340 million RCF that was due to mature in January 2026.
Outlook
Inflationary pressures on raw materials and energy are now easing, providing a more stable cost outlook in FY24 compared to the prior year, according to Greencore.
“Wage inflation will persist due to National Living Wage increases, which we will continue to manage through ongoing recovery and mitigating actions,” the company stated.
Following the strong financial and operational start to the year, with improved profit conversion, the group expects to generate an FY24 outturn in line with current market expectations.
Commenting on the performance, Dalton Philips, chief executive officer at Greencore, said: “I am extremely encouraged by the strong start to the year for our business.
“Our manufactured like-for-like volume growth of 0.5% in the quarter, continued to outperform the market in the key categories in which we operate.
“This performance has once again been supported by our outstanding operational service levels to ensure availability of products to our customers. Our focus as a team is to provide fresh and healthy foods to our customers and consumers each and every day,” he added.
“Our progress as a business has been delivered through continued effective operational and commercial initiatives, as detailed in November, this has supported improved profit conversion and a strong profit outturn in the quarter.”
Philips said that Greencore is committed to continuing to drive profitability through commercial discipline and is investing in several initiatives to develop a “robust platform” for future growth.
“While we remain mindful of the seasonally important second half of the year, we are confident that the Group will deliver a full year outturn in line with current market expectations,” he added.
Greencore
Greencore is manufacturer of convenience food, supplying all of the major supermarkets in the UK.
The company also supplies convenience and travel retail outlets, discounters, coffee shops, foodservice and other retailers.
It says that it has strong market positions in a range of categories including: sandwiches; salads; sushi; chilled snacking; chilled ready meals; chilled soups and sauces; chilled quiche; ambient sauces and pickles; and frozen Yorkshire puddings.
There are 16 manufacturing sites and 17 distribution centres in the UK, and the group generated revenues of £1.9 billion in 2023 financial year and employs 13,600 people.
