Business Irish

Thursday 14 November 2019

Greencore revenue boosted by new US sales

Greencore chief executive Patrick Coveney
Greencore chief executive Patrick Coveney
Ellie Donnelly

Ellie Donnelly

The UK's biggest sandwich maker, Greencore, reported an 11.8pc rise in revenue to £636.5m (€713m) for the three months to June 30, 2017, compared to the same time last year.

Year-to-date, the group recorded revenue of £1.646.8bn, 8.8pc up on the same time last year on a pro forma basis, according to a trading statement yesterday.

In the UK and Ireland, revenue from the company's convenience foods division grew 15.3pc to £370.6m in the three months to June 30.

The strong growth momentum delivered in the period was driven by the food-to-go business, which accounted for more than 60pc of divisional revenue, the company said.

Speaking at an event at the Dublin Business School in the capital yesterday, after the results, CEO Patrick Coveney said Greencore now accounts for as much as 60pc of all pre-cut sandwiches sold in the UK, including "pretty much all sandwiches sold in the main supermarkets, bar Tesco".

The current quarter, ending in September, will be a "real step-up" for the business as synergies from the acquisition of the Peacock business in the US last year and output from new UK factories come on stream, he said.

To help meet the demand in the UK for convenience foods the group last month purchased a sandwich-manufacturing facility near Heathrow.

According to Greencore, the "modest" acquisition will enable the company to add additional high quality manufacturing capacity to meet its food-to-go growth agenda.

Meanwhile in the US, where Greencore is number one in the frozen sandwiches market, convenience food sales recorded revenue growth of 393.3pc to £265.9m that primarily reflects the acquisition of Peacock Foods at the end of December 2016 for $747m. The business has annual sales of around $1bn.

The integration of the US business is on track and the business was "encouraged by the pipeline of commercial opportunities being explored with existing and new customers", Greencore said.

Shares rose yesterday, up 0.73pc on the back of the results to £235.30 a share.

At the Dublin Business School event, where he was interviewed by Newstalk's Bobby Kerr, Patrick Coveney said in relation to Brexit that Greencore's manufacturing base in the UK means that the issues it faces are not the same as those of Irish food producers exporting into Britain.

In Greencore's case, its UK business relies on staff, of whom 40pc currently come from elsewhere in the European Union, and free-moving supply chains including for fresh ingredients, both of which could be affected by Brexit, he noted.

Irish Independent

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