Greencore, the maker of sandwiches and ready meals for stores from Aldi to Marks & Spencer, plans to return to the acquisitions trail after unveiling a series of fresh financial targets.
The Dublin-based, but London-listed, food group said it aims to grow revenues by 3-5 per cent over the medium term, while delivering an operating profit margin of more than 7 per cent.
Chief executive Dalton Philips is also targeting a return of invested capital of more than 15 per cent for the group and is seeking to expand into new areas, including through mergers and acquisitions (M&A).
The financial targets exclude the effects of potential acquisitions.
Goodbody Stockbrokers analyst Patrick Higgins described the targets, unveiled at the start of a capital markets day for investors, as “ambitious”. The consensus estimate among analysts had been for a little over 3 per cent in sales growth per annum until 2028 and operating profit margins of 6.4 per cent, according to research firm Visible Alpha.
“We are excited to unveil Greencore’s refined strategic direction, which will build on the positive momentum from the past two years,” said Mr Philips. “As part of this plan, we are establishing a set of ambitious medium-term financial targets. We are confident in our ability to deliver these targets.”
[ Irish food group Greencore posts revenue rise in first quarterOpens in new window ]
Shares in Greencore have almost doubled in value so far this year as it continues to recover from a series of setbacks over the past four and a half years, including the Covid-19 pandemic, supply-chain and labour issues, and inflation.
Mr Philips initially signalled in December that he aims to return the convenience foods group to the acquisitions trail for the first time since before the Covid pandemic.
Greencore’s chief financial officer Catherine Gubbins told The Irish Times at the time that the group was open to purchase in three areas. These include food categories “adjacent” to its current offering, which spans sushi to ready-made Italian meals; a new convenience food area; or a new geography.
The group reported results for its last financial year to the end of September that came in advance of forecast, even after Greencore raised its projections three times over the course of 2024. Adjusted operating profit jumped 27.7 per cent to £97.5 million (€117 million).
Greencore said last week that its first quarter revenues rose by 7.5 per cent to £474.3 million, with its food-to-go categories – comprising sandwiches, salads, sushi and chilled snacking – delivering 7.2 per cent growth, while other convenience categories rose 8.1 per cent.
- Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
- Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
