Sunday 16 June 2019

Greencore reports small increase in earnings amid 'challenging' UK grocery sector

Patrick Coveney, Greencore CEO
Patrick Coveney, Greencore CEO
Ellie Donnelly

Ellie Donnelly

Food group Greencore has reported a marginal increase of 0.2pc in adjusted earnings in the six months to 29 March 2019.

Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were £62.5m (€71.3m), up from £62.4m (€71.2m) a year earlier, according to interim results from the group.

Group revenue was down 4.6pc to £701.4m (€800m).

Describing the first half of the year as “good”, chief executive Patrick Coveney said the group had extended its leadership position in key food-to-go categories in the UK.

This comes despite what he said were “challenging” trading conditions in the wider UK grocery market.

“While recognising that trading conditions in the wider UK grocery sector remain challenging, the growth outlook for our business continues to be encouraging, underpinned by favourable consumer trends and ongoing investment by our customers,” Mr Coveney said.

“As a result, we believe that our market positioning, capability set, customer relationships, well invested asset network and proven economic model will deliver strong future growth, cash generation and returns," he added.

The group's food-to-go business accounted for around 64pc of revenue.

The group's other convenience categories, which include activities in the chilled ready meals, chilled soups and sauces, chilled quiche categories saw its revenue decline 19.8pc to £254.3m.

On the subject of Brexit, Greencore believes the risks are in the medium-term, however it said it acknowledges that the near-term challenges associated with a disorderly exit remain uncertain.

Overall, and adjusted profit before tax was up 17pc to £37.1m (€42m), while Greencore’s adjusted earnings per share were 6.4pence, up 16.4pc year-on-year.

Net cash proceeds from the disposals totalled £811.4m during the period, of which £810.4m related to the disposal of the US business.

Elsewhere and the group announced that Peter Haden will take up the role of chief operating officer.

Mr Haden was appointed CEO of the UK division of Greencore in July 2018.

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