Greencore saw its pro-forma revenue increase by 5.8% in the first quarter of its financial year, with pro-forma revenue up 6.4% in the group's key food-to-go business.
In the coming year, the company expects 'continued underlying revenue growth in its key convenience food categories’.
Here's how leading industry analysts saw its performance:
Darren Shirley, Shore Capital
"Greencore’s Q1 trading update made, to us, pleasant reading and confirmed robust trading across its core UK and Irish activities, which are now the heartbeat of the group, post the recently completed disposal and exit from the USA.
"Post receipt of the £802 million net proceeds from the US disposal in Q1, Greencore reports it has repaid 'certain borrowings and relevant derivative financial instruments' and ended the period in a net cash position. This will undoubtedly be a temporary position, with the result of the tender offer through which the group will return [approximately] £509 million (at 195p), expected on Thursday (31 January), conditional on shareholder approval at today’s annual general meeting.
"We fully expect to issue new forecasts post the announcement of the tender offer (so within a few days), though, amidst a very tough trading environment, we view Greencore’s Q1 FY2019 delivery as a more-than-commendable performance."
Jason Molins, Goodbody
"Greencore has released a solid Q1 trading update this morning, despite the backdrop of challenging trading conditions. Group like-for-like pro-forma revenues increased by 5.8%, with good growth seen across both of its activities in the Convenience Foods UK & Ireland division.
"The group has affirmed its FY19 outlook, whilst noting that despite the risks with Brexit being manageable in the medium term, the near-term challenges are more 'uncertain' in a no-deal scenario. The group’s proposed tender offer ([approximately] £509 million) is subject to shareholder approval at the AGM today, with completion expected by no later than 7 February.
"The strong performance of the Convenience Foods UK & Ireland division was particularly driven by Food to Go (FTG), with revenues increasing by 6.4% on a pro-forma basis, with growth likely to have been driven by third-party distribution, as well as a solid out-turn from the underlying category. For the remaining parts of the division – [e.g.] non-FTG, such as ready meals, soups and sauces, quiche, ambient sauces and pickles, and Yorkshire puddings – pro-forma revenues increased by 4.7%."
Cathal Kenny, Davy
"Underlying volume growth in Greencore’s core manufactured Food-to-Go segment was broadly as anticipated, while other activities were more buoyant. Its qualitative outlook statement calls for continued underlying revenue and profit growth in FY 2019.
"Against a more tempered revenue environment, productivity initiatives will take on greater significance. We anticipate no material change to our FY 2019 operating profit forecast (£108 million)."
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