Greencore reports strong Q1 growth with 7.5% revenue increase

Pictured: Dalton Philips of Greencore

Growth was driven by increased volumes, new business wins, and inflation recovery

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31 January 2025

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Greencore Group plc (‘Greencore’ or the ‘Group’), recently issued its trading update for the 13 weeks ended 27 December 2024  (“Q1” or “the quarter”). 

Q1 FY25 Group reported revenue increased by 7.5% to £474.3 million (€566.9 million), driven by an increase in volumes and mix (including the benefit of net new business wins) of 4.0%, and the positive impact of inflation recovery and price of 3.5%. 

On a Like-for-Like basis revenue grew at 4.9%[2].  

Total volumes for the quarter increased 2.6% due to underlying volume growth, supplemented by new business won during FY24, compared to an overall market  performance of 0.5%[3]

This was delivered despite its customers remaining under significant cost pressure from government driven policy changes and a changing competitive  landscape. 

Revenue results

Q1 FY25 reported revenue in food to go categories increased 7.2% to £314.7 million (€376.1 million), driven  by an increase in volumes and mix (including the impact of net new business wins) totalling 2.8%, and the impact of inflation recovery and price totalling 4.4%. 

Overall sandwich volumes increased 2.5% year on year, versus a market performance of 2.4%[4]

Sushi continued to show positive momentum with volume growth of 15.3% year on year, driven by the launch of a new range with one of its customers. 

Reported revenue in other convenience categories was £159.6 million (€190.7 million), an 8.1% increase  year-on-year, which was driven by an increase in volumes and mix (including the benefit of  net new business wins) totalling 6.4%, and the impact of inflation recovery and price, totalling 1.7%. 

Overall chilled ready meals volumes increased 23.5% year on year, driven by  the onboarding of a significant new chilled ready meals contract. 

New products

The Group launched 102 new products across the festive season, an important period for the categories in which it operates. 

The Group partnered with its customers on multiple innovations, including the Japanese inspired Christmas Sando, and a new sandwich combination which offers the ‘Boxing Day lunch’ experience. 

In its other convenience categories, the Group launched premium savoury cheesecake slices, which sold out on pre-order for one of its main customers, and a Christmas mayonnaise range. 

Christmas launches were executed with impeccable service levels (99.3% across the festive season). 

Additionally, many of its products won taste tests across television and print media, endorsing the extensive work by its food innovation teams during the year. 

Capital Markets Event 

The Group will hold a Capital Markets Event for analysts and institutional investors in  London on 5 February 2025. 

Topics will include product innovation, automation, operational  and commercial excellence, and the ongoing investment in the business’s infrastructure. 

The team will also share their vision for the Group’s future, the role of M&A, and outline the  approach to capital allocation and delivering shareholder returns over the medium term. 

Positive start

“The Group has made a positive start to FY25, and I am encouraged by the platform this  provides us for the rest of the financial year,” said Dalton Philips, chief executive officer, Greencore.

The Group’s volume growth of 2.6% in the quarter again outperforms the market and is driven by both underlying volume growth and winning new  business. 

This reflects a combination of the quality of its products, its commitment to innovation and the strength of the Group’s relationships with its customers. 

The Group will continue to make progress against each of its strategic objectives and are well positioned to continue this momentum through FY25. 

It also continues to remain focused on making high quality food, enhancing its profitability, and strengthening its position as the UK’s leading convenience foods manufacturer. 

“We have delivered a strong Q1 and are confident that we will deliver a full year performance  in line with current market expectations. We will share more detail on our medium-term  growth strategy at our Capital Markets Event in February,” concluded Philips. 

Outlook

·The Group continues to face an unprecedented labour cost challenge from the National  Living Wage and National Insurance increases set out in the UK Budget and as highlighted  in its year end update, the Group are committed to offsetting this in full in the following ways;  manufacturing automation, operational excellence, labour planning and technology investment, alongside its usual inflation recovery measures.

The nature of the business is labour-intensive, and the Group has been working hard to offset this cost, however given the  scale of the challenge, the Group are also engaging in constructive dialogue with its customers to  help mitigate these costs.

Read more: Greencore reports record €540.5m Q3 revenue

 

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