Dublin-headquartered convenience food group Greencore has lifted its annual profit outlook on the back of increased sales of food-to-go categories including sandwiches and sushi.
The UK’s largest sandwich-maker said in a trading update on Wednesday, that it now expects full-year adjusted operating profit to reach £125 million (€144 million). It had previously forecast operating profit of between £118 million and £121 million.
Greencore credited the increased profit outlook to “strong volume momentum and a focus on cost management” noting it had sought to reduce waste at its plants as well as increasing the efficiency of its on-site labour.
“We had another excellent quarter in Q4, which rounded out an exceptional year,” said Greencore chief executive, Dalton Philips. “While there are wider economic headwinds, the strong performance means we are again upgrading our full-year guidance.”
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In its full year to the end of September, Greencore expects to report revenue of about £1.95 billion - up nearly 8 per cent - on the back of continued volume growth in the final quarter of their financial year.
[ UK watchdog starts scrutiny of Greencore’s £1.2bn Bakkavor dealOpens in new window ]
Volume growth was especially strong in food-to-go categories including sandwiches and sushi, the company said.
Manufactured volume, the company said, has grown by 3 per cent and underlying volume growth rose by 1 per cent.
Greencore said it continued to “drive strong cashflow and strengthen its balance sheet” during the period and that its net debt to Ebitda (earnings before interest, tax, depreciation and amortisation), a key measure for the company, was “well below the medium-term target range”.
In April, Greencore secured backing from Bakkavor’s board for a £1.2 billion purchase of its London-based peer.
This would create a convenience food business in the UK with combined revenue of £4 billion and about 30,500 employees. Existing Greencore investors would own 56 per cent of the group if the deal is given the green light by UK competition regulators.
The UK’s Competition and Markets Authority is due to announce its phase one decision on the merger at the end of October.
Greencore is a supplier to some of the biggest supermarkets in the UK, manufacturing more than 750 million sandwiches and food-to-go products each year.
Across 16 manufacturing sites, the Dublin-based company employs more than 13,000 people to produce convenience foods such as sandwiches, salads, sushi, ready meals, and soups.
