TIDMGNC
RNS Number : 2204M
Greencore Group PLC
27 July 2017
27 July 2017
Greencore Group plc - Trading Statement
Continued strong growth in both UK Food to Go and the US
Greencore Group plc ("Greencore" or the "Group"), a leading
manufacturer of convenience food in the UK and US, today issues a
trading update covering the 13 weeks to 30 June 2017 ("Quarter 3"
or "Q3") and the 39 weeks to 30 June 2017 ("Year to Date").
Quarter 3 and Year to Date Trading(1)
The Group recorded revenue of GBP636.5m in the 13 weeks to 30
June 2017, an increase of 76.6% on the prior year on a reported
basis and of 11.8% on a pro forma basis. Year to Date, the Group
recorded revenue of GBP1,646.8m, 56.5% ahead of the prior year on a
reported basis and 8.8% ahead on a pro forma basis.
Convenience Foods UK & Ireland
The division reported Q3 revenue growth of 20.9% to GBP370.6m,
an increase of 15.3% on a pro forma basis. Year to Date, reported
growth was 17.8% to GBP1,056.2m, up 12.2% on a pro forma basis.
The strong growth momentum delivered in the period was driven by
the Food to Go business, which accounted for more than 60% of
divisional revenue in Q3. Reported revenue grew by 32.6% and pro
forma revenue grew by 22.7% in the quarter. This performance was
driven by positive underlying market growth as well as by the
delivery of the previously announced business wins with several of
the Group's largest customers. Operational disruption relating to
the launch of these business wins has reduced in Q3.
At the end of June 2017, the Group acquired a sandwich
manufacturing facility in West Drayton, near Heathrow. This modest
acquisition enables Greencore to add additional high quality
manufacturing capacity to meet its food to go growth agenda.
In the other parts of the Convenience Foods UK & Ireland
division (which include the Prepared Meals and Grocery set of
businesses in the UK, and the edible oils and molasses trading
businesses in Ireland), reported revenue grew by 6.4% in Q3, and by
5.3% on a pro forma basis, with particularly strong revenue growth
in our Irish ingredients businesses. Trading conditions were
challenging in our ready meals, cakes and desserts businesses
during the quarter.
Convenience Foods US
The division reported Q3 revenue growth of 393.3% to GBP265.9m,
an increase of 6.6% on a pro forma basis. Year to Date, reported
growth was 280.5% to GBP590.6m, up 3.9% on a pro forma basis.
Reported revenue growth primarily reflects the acquisition of
Peacock Foods at the end of December 2016.
Progress with our consumer packaged goods customers (in the
business formerly known as Peacock Foods) continues to be
encouraging. On a pro forma basis, revenue was up 4.6% in Q3 in
this business, with pro forma volume growth up approximately 8% in
the quarter. This volume growth, which is a more meaningful
indicator of underlying performance, was driven by good category
growth and the expansion of our Carol Stream, Illinois, facility to
cater for a contract win in meal kits. Pro forma revenue growth
with our retail customers (in the original part of our US business)
was 12.8% in Q3.
The integration of the US business is on track and the Group is
encouraged by the pipeline of commercial opportunities being
explored with existing and new customers. The Group believes that
these opportunities, as well as an improving customer mix, will
help the US division to leverage its enlarged network footprint and
wider capabilities in order to drive profitable growth in FY18 and
beyond.
Outlook
Q4 is the most seasonally important period for Greencore in both
the UK and the US. This year, the step up in activity is expected
to be even more significant given the integration of Peacock Foods,
as well as the new business wins and associated project work in
both the UK and the US. Notwithstanding the scale of this step up,
and the fact that trading conditions remain challenging in certain
parts of our UK portfolio, the Group anticipates that the FY17
performance will be in the range of current market
expectations.
As indicated in the H1 results in May 2017 and at our Capital
Markets Day Event in Chicago last month, this is a transformational
period for Greencore. The Group is confident that this exciting
phase of operational and network investment will allow it to take
full advantage of its exposure to higher growth categories and, in
turn, to enhance Group profit, cashflow, and returns.
Conference Call
A conference call for investors and analysts will be held at
8.30am BST today. Dial in details are below and a replay facility
will be available afterwards at www.greencore.com.
Conference call details:
Ireland: +353 (0) 1 246 5603
UK: +44 (0) 20 3427 1903
US: +1 718 354 1158
Access code: 1469517
For further information, please contact:
Eoin Tonge Chief Financial Officer Tel: +353 (0) 1 605 1029
Jack Gorman Head of Investor Relations Tel: +353 (0) 1 605
1020
Rob Greening or Nick Brown Powerscourt Tel: +44 (0) 20 7250
1446
(1) All prior year comparisons are to the 13 weeks to 24 June
2016, as presented in the Q3 2016 trading statement of 26 July
2016; pro forma references throughout this statement are on a
constant currency basis and are adjusted to reflect ownership of
both The Sandwich Factory and Peacock Foods for the relevant
periods in both FY16 and FY17
NOTES TO EDITORS
Greencore is a leading international producer of convenience
foods with extensive operations in the UK and the US. Headquartered
in Dublin, it employs 16,000 people in 31 manufacturing facilities
across the UK and the US. On average, it manufactures around 1.5
billion sandwiches and 140 million ready meals every year.
In the UK, it has strong market positions across sandwiches and
other food to go products as well as complementary positions in
other convenience food categories, including chilled prepared
meals, chilled soups and sauces, ambient sauces and pickles, cakes
and desserts and Yorkshire Puddings. It is a supplier of own-label
products to all of the major UK supermarkets, and has world-class
manufacturing sites with industry-leading technology and supply
chain capabilities.
Following its acquisition of Peacock Foods in December 2016,
Greencore is now a leading manufacturer of consumer packaged goods
for many of the largest food brands in the US. The Group also
produces chilled and frozen food to go products for convenience
retail and food service leaders in the US.
For more information go to www.greencore.com or follow Greencore
on social media.
This announcement is based on information sourced from unaudited
management accounts.
This announcement contains certain forward looking statements
with respect to the financial conditions, results of operations and
businesses of the Group. These statements involve risk and
uncertainty because they relate to events and depend upon
circumstances that will occur in the future. There are a number of
factors that could cause actual results or developments to differ
materially from those expressed or implied by these forward looking
statements. Nothing in this announcement should be construed as a
profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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