Convenience food group Greencore has reported a return to profitability and higher revenues for the first half of its fiscal year.
Greencore said its profit before taxation increased from a loss of £1.8m the same time last year to a profit of £1m this year, on the back of higher group operating profit and lower finance costs.
Its revenues for the 26 weeks to March 25 rose by 33.6% to £770.8m which it said reflected the recovery in demand in food to go categories and the impact of new business wins for the 26 weeks to March 25.
The company noted a “substantial” increase in inflation in its main cost components in the first half of 2022.
Gary Kennedy, Greencore’s Executive Chair, said the company delivered H1 revenues that are back above pre-Covid levels, which is a great achievement against a backdrop of mobility restrictions, supply challenges and emerging inflation.
“There has been encouraging momentum in revenue and profit conversion in the first seven weeks of H2, and we are confident in our ability to navigate our way through the current well-publicised macro challenges as we enter our peak seasonal trading period,” Mr Kennedy said.
“Our strong market positions, close customer relationships and intense focus on efficiencies mean that we look to the future with optimism, and we expect to deliver a full year out-turn in line with market expectations,” he added.
Earlier this month Greencore appointed Dalton Philips as its new chief executive and executive director.
Mr Philips, the chief executive of airports operator daa, will join Greencore in September and replaces Patrick Coveney who left the company at the end of March to take up the CEO job at SSP Group, an operator of food and beverage outlets in travel locations including Upper Crust.
In today’s results statement, Greencore said that the UK trading environment, especially in food to go categories, continued to recover in the six months to the end of March, despite some demand volatility caused by mobility restrictions associated with the emergence of the Omicron Covid-19 variant in December and January.
The company said it also benefitted from its strong market position in the grocery retail channel, its expanded customer and format mix, and its portfolio across food to go and other convenience categories.
During the six month period, Greencore said it launched over 600 new or reformulated products within its range of about 2,000 products.
Examples of launches with key customers this year include fresh meals in food to go categories, fresh noodle pots, new plant based ready meals, and an extended range of ‘dine-at-home’ meal boxes.
It also expanded its product offering in the salads and fresh meals categories and worked closely with one of its key food to go customers to extend its offering into the store network of a leading UK coffee shop retailer.
Greencore’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 an Irish ingredient trading business.
Greencore said it intends to restart value return to shareholders of up to £50m over the next two years, initially in the form of a share buyback programme.