Sandwich giant Greencore reports return to revenue and profit growth

Sandwich giant Greencore reports return to revenue and profit growth

Convenience food group Greencore has reported a return to revenue and profit growth for the year to September 24, saying it is emerging strongly from a challenging period due to Covid-19.

Its group revenue for the year rose by 4.8% to £1.325 billion on the back of a return to growth in food to go categories and solid growth in other convenience categories.

The company’s adjusted operating profit was up 20% to £39m, while its group operating profit soared by almost 232% to £42.8m from £12.9 the previous year.

The company confirmed last week that Patrick Coveney is to step down as CEO of the company next year to take up the role of CEO at Upper Crust owner SSP Group, which operates food and beverage outlets in travel locations.

Greencore, which is the biggest sandwich maker in the UK, said that trading so far in its new financial year has been encouraging with continued positive revenue momentum across the business.

“As mobility increases towards pre-pandemic levels, there is strong demand in food to go and other convenience categories,” it stated.

Supply challenges

Greencore said that as the economy reopened after Covid restrictions, supply-side challenges emerged across the UK food industry.

“This has been primarily driven by tight labour availability, with a marked impact on logistics and the supply of inbound materials,” it said.

“Greencore has not been immune to these impacts but delivered strong operational service levels in this context, supported by its own direct-to-store distribution network,” a spokesman added.

Patrick Coveney, Greencore’s chief executive, said that the company has weathered the storm and emerged strongly from a difficult period.

“Following a challenging first half in FY21, we made good progress in rebuilding revenues, cashflows and profitability in H2 and are confident of maintaining this positive trajectory in the year ahead, particularly in the seasonally important second half,” he said.

He said the strong recovery of the UK food to go market, as well as solid performance in other convenience food categories, underpins this confidence.

“New business wins achieved last year are contributing to our momentum, and we anticipate delivery of profits for the year ahead in line with current market expectations,” he said.

“With strong free cashflow and a significant reduction in leverage achieved in FY21, the Group enters the new financial year on a robust financial footing,” he said.

“Greencore has a strong position in the dynamic UK convenience food market and, with demand remaining strong in the early stages of FY22, has confidence in its medium-term prospects,” the outgoing CEO added.