Convenience foods firm Greencore has posted a 3.5% decrease in sales to £1.45 billion (€1.69 billion) in full-year 2019, which the group said primarily reflected the impact of site disposals and business exits, however subdued consumer sentiment was also a factor.
Pro-forma revenue growth at the business was 2.6% for the year, while adjusted operating profit was up 0.9% to £105.5 million (€123.3 million).
The group said that its full-year performance was delivered 'against the backdrop of a subdued UK trading environment', with consumer demand 'cautious' due to the uncertainty around Brexit.
'Reset Our Business'
“Over the past twelve months we have fundamentally reset our business, anchored by a clear strategy to drive shareholder value by expanding our category and channel capabilities within the diverse, growing and attractive UK food to go market," commented Patrick Coveney, Greencore chief executive.
"The evidence of this can be seen in the launch of multiple commercial and innovation projects with key customers, and in the recent acquisition of Freshtime. As a result of this reset strategy, we anticipate another year of profitable growth in FY20.”
Food-To-Go
The group's core food-to-go business, which comprises sandwiches, salads, sushi and chilled snacking, and accounts for two thirds of the business' sales, posted reported revenue growth of 3.6%, or pro forma revenue growth of 3.3%.
It noted that the performance of this business was stronger in the first half of the year (+7.0% in H1, compared to +0.3% in H2), due to 'challenging market conditions, unseasonal weather, a varied trading performance across customers, and a strong comparative period in the second half of the year'.
Greencore's 'other convenience' category, which includes its activities in ready meals, chilled soups and sauces and other meal accompaniments, posted a reported revenue decline of 15.0%, however this was largely due to site disposals, such as in Hull, Evercreech and Kiveton. Pro forma revenue at this division increased by 1.2%.
One year ago, in November 2018, the business exited the US market with the disposal of its interests there to Hearthside Food Solutions, with a profit on disposal of £55.9 million reported in FY19 to reflect this transaction, the group said.
Planning For Brexit
On the threat of Brexit, Greencore said that it has been engaged in Brexit planning since the result of the referendum was announced, 'particularly in the areas of volume, material sourcing and labour availability', it said.
'The Group continues to believe that the risks from Brexit are manageable in the medium term, while acknowledging potential near-term challenges associated with a disorderly exit.'
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones Click subscribe to sign up to ESM: The European Supermarket Magazine.
