Convenience food firm Greencore has reported 20.1% growth in revenue to £925.8 million (€1 billion) in the first half of of its financial year.
Overall manufactured volume growth, including new business, accounted for 5.0% of this growth in this period.
However, the company reported a loss before tax of £6.2 million (€7.21 million), down from a profit of £1.0 million (€1.2 billion) in the same period last year, due to lower operating profit and increased finance costs.
Dalton Philips, chief executive officer of Greencore said, "We are pleased to have delivered strong revenue growth in the seasonally quieter first half of the year, and it is a clear demonstration of Greencore’s ongoing resilience in what is a difficult consumer spending environment.
"While much of the top line momentum has been driven by recovery of inflation, it is encouraging to have achieved good manufactured volume growth, which speaks to the enduring structural demand for the categories in which we operate."
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Food-to-go revenue increased by 15.6%, while other convenience categories’ reported growth of 28.5%, with these increases driven by the recovery in cost inflation, new business wins, and underlying volume growth.
Inflation significantly increased year-on-year compared to the first half of 2022, and Greencore recovered or mitigated the majority.
Other Highlights
Adjusted operating profit amounted to £11.8 million, while the adjusted operating margin for the period was 1.3%.
The adjusted operating margin was impacted by the denominator effect of elevated inflation, the company said.
Greencore expects reported operating profit into the second half to improve in line with the seasonality of the business and recovery of the lag in inflation.
Better Greencore, the group’s change programme, continued to deliver benefits for the group and support the mitigation of fixed cost and overhead inflation.
The company noted that it is focused on achieving approximately £30 million (€34.7 million) of annualised benefits from this programme by the financial year 2024, as previously announced.
Outlook
The group said that it recovered or mitigated a significant component of the input cost and other inflation incurred during the first half through explicit recovery mechanisms, constructive dialogue with customers and operational and cost efficiencies.
Looking ahead to the remainder of the year, Philips added, "We remain confident in the long-term potential for the business and our immediate priority is to rebuild profitability and returns in order to create a platform on which to build for future growth.
"Critical to this rebuild strategy will be a combination of rigorous management of our customer, product and asset portfolio, and a reset approach to operational excellence, supported by continuing our unwavering approach to inflation recovery and cost management."
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