The manufacturer of convenience food has today (Tuesday, May 25) issued its interim results for the six months up to March 26.
The group operating profit dropped significantly to £3.9 million compared to £35.6 million the same time last year.Improvement as economy reopens
In the group’s 'food-to-go' categories (comprising sandwiches, salads, sushi and chilled snacking) reported revenue was £339.2 million, a decrease of 25.6% on both a reported and pro forma basis. This revenue trajectory improved towards the end of Q2 as the economy started to reopen, with March levels approximately 19% below prior year levels.The group’s other convenience categories comprise activities in the chilled ready meals, chilled soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire pudding categories, as well as Irish ingredients trading businesses.
Reported revenue across these businesses decreased by 7.4% to £237.9 million in the first half of 2021. Revenue in the group’s remaining Irish ingredients trading business also declined. The group said that "the operational and financial impact" of Brexit has so far this year been "minimal and is anticipated to remain so in the second half of the year".Outlook for Greencore
Greencore said that there was "encouraging revenue momentum" in the first seven weeks of H2 2021, with pro forma revenue in food-to-go categories running at approximately 123% above prior year levels and approximately 14% below the equivalent pre-Covid levels in 2019.The group anticipates that a continued reopening of the UK in line with the current roadmap and a consequential rebuild of group revenue would be expected to generate a 2021 financial year adjusted operating profit outturn above 2020 levels.
The group's net debt, which has been reduced by £79.2 million since the end of 2020 to £271.3 million, is expected to drop further in the second half of this year.A challenging period
Commenting on the results, Greencore CEO Patrick Coveney said the focus now is on "rebuilding revenue, profitability and cash flow momentum as the UK economy reopens"."This has been a challenging period for Greencore, but the consistent build in our revenues since early March as lockdown measures have eased and Covid-19 cases have fallen give us real cause for optimism," Coveney said."We are confident of being able to build back the business rapidly and profitably, and are optimistic about the medium-term prospects for Greencore.”
