Greencore has posted a 1.8% increase in revenue in the first quarter of its financial year, recording 0.7% growth in pro forma terms.
"Following a steady start to 2020, we look forward to delivering a year of profitable growth," chief executive Patrick Coveney said of the results.
Here's how leading industry analysts viewed its performance:
Cathal Kenny, Davy
"The muted start to FY 2020 was not unexpected in the context of a challenged retail backdrop and strong prior year comp. Like-for-like growth in Food-to-Go (FtG) (+0.5%) was driven primarily by salad and sushi adjacencies — core sandwiches were broadly flat (70% of FtG).
"Full-year growth and profit delivery is anticipated to be H2 weighted with management retaining its conviction around the path to growth rebuild. We anticipate no material change to our FY 2020 forecasts."
Jason Molins, Goodbody
"Greencore has released a solid Q1’20 trading update this morning despite the backdrop of challenging trading conditions. Group lfl pro-forma revenues increased by 0.7% (1.8% on a reported basis), largely in line with forecasts, driven by a solid outcome across both of its key product categories.
"Key highlights from today’s update include: (i) The Food to Go categories delivered 0.5% pro-forma revenue growth which we note is against a tougher prior year comparative (Q1’19 6.4%) and, as expected, is broadly consistent with the outcome achieved during H2’19; (ii) Freshtime has performed well during the quarter; (iii) Revenues from the other convenience categories increased by 0.9% on a pro-forma basis, with reported revenues (-3.0%) impacted by the exit from longer life ready meals at Kiveton in H1’19."
Darren Shirley, Shore Capital
"Greencore has reported a solid start to its 2020 financial year, with total Group revenues reported at £368m, an increase of 1.8% on a reported basis with a first contribution from the Freshtime acquisition made in September 2019 (cost £56.0m) more than offsetting the exit from ready meal activities at Kiveton.
"Management has not provided any additional colour on the cost base or its outlook for potential inflationary pressures, and in this respect, we do not expect anything to have changed since the recent FY2019 preliminary results published on the 26th November.
"With management reiterating its’ expectation of 'a year of profitable growth' we leave our Greencore financial expectations unchanged post today’s update, looking for FY2020 CPTP of £101.8m and EPS of 18.3p. We also look for a further fall in net debt (ND) to £261m as part of management’s broader capital allocation policy, with management also reiterating that it continues to 'consider further organic and inorganic' strategic opportunities."
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