Convenience food group Greencore has recorded an increase in earnings for the first half of the year but warn of 'tough' UK market conditions for the remainder of 2013.
The Greencore group recorded sales of £572.9 million, up 0.9% on last year's result. Group operating profit for the six-month period increased by 6.3% to £33.7 million, while adjusted pre-tax profits, excluding costs such as pension finance items and M&A-related amortisation, were up by 9.9% to reach £26.5 million.
Net profit was up 18.3% to hit £22 million for the six months ended 29 April 2013. The Group, which published its half-year results today, 21 May 2013, stated that growth rates in its core UK categories were lower than in the same period last year, even before the impact of the horsemeat scandal took hold. Convenience foods revenue increased by 1.8% to hit £542.1 million.
Second Quarter Expectations
Looking to the second half of 2013, Greencore anticipates that market conditions are to remain tough during the rest of the financial year, with the UK market showing 'little or no volume growth'. However, Greencore stated that it is "strategically well-positioned to confront these challenges" owing to its "balanced" customer portfolio and exposure to faster growing convenience categories.
"With the tight financial controls we have in place, we remain confident in our ability to deliver adjusted EPS growth for the financial year in line with expectations," the company said.
Commenting on the results, Patrick Coveney, chief executive officer said, "We have made good progress on our strategic agenda during the first half of the year, despite the fact that market conditions throughout the period proved very challenging." He continued, "the UK retail environment remains under severe pressure and this was exacerbated in Q2 by the horsemeat scandal, which has temporarily driven the ready meals market lower. Although we expect market conditions to remain tough, we remain confident in our ability to deliver adjusted EPS growth for the financial year in line with expectations."
