Convenience food firm Greencore Group said it delivered a 'strong financial and operational' performance in the first quarter of its financial year, underpinned by good customer service levels (99.2%) and improved profit conversion.
Like-for-like (LFL) revenue at Greencore increased 5.8% year on year during the quarter, driven by an increase in LFL manufactured volumes and inflation recovery initiatives, the company said in a trading update.
LFL manufactured volumes increased 0.5%, with LFL volumes seeing a 5.6% jump in the four weeks to 24 December 2023 against an overall market performance of 1.8%.
Dalton Philips, chief executive officer of Greencore, stated, “Our manufactured like-for-like volume growth of 0.5% in the quarter, continued to outperform the market in the key categories in which we operate.
“This performance has once again been supported by our outstanding operational service levels to ensure availability of products to our customers. Our focus as a team is to provide fresh and healthy foods to our customers and consumers each and every day.”
Other Highlights
The company's reported revenue decreased 4.7% year on year to £441.3 million (€516.4 million) in the first quarter.
The food-to-go categories witnessed 0.9% year-on-year increase in reported revenue to £293.7 million (€343.7 million), while other convenience categories registered a 14.2% decline to £147.6 million (€172.7 million).
In the food-to-go segment, manufactured volumes, including exited contracts, declined 2.9%, while the convenience categories, including exited contracts, also fell 7.3%.
Greencore noted that the decision to exit several contracts in its financial 2023, including a chilled ready meals contract, accounted for approximately a 6% decrease in year-on-year revenue on a pro forma basis.
Outlook 2024
The company expects to perform in line with current market expectations in its 2024 financial year.
Inflationary pressures on raw materials and energy are now easing, providing a more stable cost outlook in the current financial year compared to the prior year, it noted.
It added that wage inflation will persist due to National Living Wage increases.
Philips said, “We are committed to continuing to drive profitability through commercial discipline and are investing in several initiatives to develop a robust platform for future growth.
“While we remain mindful of the seasonally important second half of the year, we are confident that the group will deliver a full year outturn in line with current market expectations.”
