Greencore sales up 10.6% in strong food-to-go market

Sandwich and convenience food giant Greencore has reported a surge in revenue as demand for food to go remains strong.

Reporting its preliminary unaudited results for the year ended 30 September 2016, Greencore announced revenues of £1,481.9m – up 10.6% as reported and 5.9% on a like-for-like basis. Group EBITDA rose 13.9% to £138.3m.

Greencore, which today (14 November) also announced the planned acquisition of US convenience foods business Peacook Foods, said it has grown its share of sandwiches in the grocery channel from 36% to 59% over the past five years.

Food to go division

Revenue in its UK Food to Go division – which represents about 45% of group revenue and comprises sandwiches, sushi and salads – grew 12.3% year on year.

Greencore reported that the sandwich category and the broader chilled food-to-go market showed good growth in the financial year in the grocery channel, with the sandwich market 4.5% up year on year and chilled food-to-go up 5.6%.

Activity in the year has included commissioning a new sandwich facility in Northampton and completing construction of a sushi facility on the same site. The business added further production lines at its two London sites to support the roll-out of a multi-year, sole supply agreement with a major customer.

In July 2016, the group acquired Warwickshire-based The Sandwich Factory from sausage-maker Cranswick.  At the time, Greencore said this would extend its operations beyond its current core business with large grocery retailers and take it into convenience stores and the travel sector.

Grocery division

Greencore’s grocery division – which includes sauces, pickles, Yorkshire puddings, cakes and chilled desserts, and represents about 20% of group revenue – was hit by price deflation in the face of lower input cost prices and intense retail competition.

Reported revenue in the division grew 0.7% and was 1.2% lower on a like-for-like basis. 

"In the UK, we have delivered substantial like-for-like growth against the backdrop of a challenging retail market and an uncertain economic environment, and in the US we now have a business that is primed to deliver sustainable, profitable growth,” said Greencore chief executive Patrick Coveney.

“Given the underlying commercial momentum across the group, our strong market positions, the transformational acquisition of Peacock Foods in the US that we have announced separately today, and our recent new business wins, we are confident about Greencore's future prospects."

The business added that it expected to continue with “significant investments” in the UK to secure, commission and launch new business wins.

“The general economic backdrop in the UK is expected to remain challenging given the changing nature of the grocery industry, emerging inflationary pressures and other geopolitical uncertainties,” it added. “Given our strong market positions, commercial momentum and new business wins, we are confident that Greencore is well set to achieve further progress in FY17 and beyond.”

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