Greencore Q3 revenue up 76.6% - but challenges for cake and dessert in UK

Revenue at food-to-go business Greencore has soared despite “challenging conditions” in parts of its UK business.

The business reported revenue up 76.6% year on year to £636.5m in the 13 weeks to 30 June. Group revenue was 11.8% year on year on a pro forma basis, which assumes - for comparison purposes -the company had owned recent acquisitions Peacock Foods and Sandwich Factory for FY16 and FY17.

Greencore’s UK and Ireland division reported Q3 revenue growth of 20.9% to £370.6m, an increase of 15.3% on a pro forma basis

The strong performance was driven by the food-to-go business, which accounted for more than 60% of divisional revenue in Q3. Reported revenue grew 32.6% and pro forma revenue grew 22.7% in the quarter.

At the end of June, Greencore acquired a sandwich manufacturing facility in West Drayton, near Heathrow, from Tasties of Chester, which the group said would add “additional high-quality manufacturing capacity to meet its food-to-go growth agenda”.

However, Greencore said trading conditions were “challenging” for its UK and Ireland cake and dessert businesses during the quarter.

Other parts of the UK and Ireland business saw revenue grow by 6.4%, and by 5.3% on a pro forma basis, with particularly strong revenue growth in its Irish ingredients businesses.

In the firm’s US division – which includes the Peacock Foods business acquired last December – revenue rose 393.3% to £265.9m, and was up 6.6% on a pro forma basis. Year-to-date reported growth was 280.5% to £590.6m, up 3.9% on a pro forma basis.

Greencore said the current fourth quarter was the most seasonally important for the business in the UK and US.

“This year, the step up in activity is expected to be even more significant given the integration of Peacock Foods, as well as the new business wins and associated project work in both the UK and the US,” stated the company.

“Notwithstanding the scale of this step up, and the fact that trading conditions remain challenging in certain parts of our UK portfolio, the group anticipates that the FY17 performance will be in the range of current market expectations.”

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