FDBusiness.com

Greencore, one of the leading players in the UK convenience foods market, has increased revenue by 8.7% to £804.2 million, and by 4.3% on a like for like basis, for the year ended 30th September 2011. However, group operating profit from continuing operations at £51.5 million was flat and the operating margin slipped to 6.4% compared to 7.0% in the previous year. Profit before tax (after exceptional items of £24.3 million) was £11.2 million, against £26.2 million in the previous year. Included in the exceptionals was a cost of £12.3 million for Greencore’s unsuccessful bid for Northern Foods.

The core Convenience Foods division delivered a good performance in some of the most challenging market conditions in many years with revenue growth of 8.0% to £732.2 million and operating profit up 5.3% to £49.3 million, resulting in an operating margin of 6.7%. The UK retail market has experienced a difficult year with volume declines for the first time in many years.

Patrick Coveney, chief executive of Greencore.

Against this background, Greencore has continued to grow revenues through its exposure to faster growing categories, through meeting consumer and customer needs and through new business gains. The UK business experienced input cost inflation of 4% and this was successfully mitigated through internal efficiency programmes, product reconfiguration and selective price increases.

During the year, Greencore strengthened its convenience foods business in both the US and the UK. In December 2010, the group completed the acquisition of On a Roll Sales, a US-based business predominantly manufacturing and distributing a ‘food to go’ offer for the convenience channel. The business has profitably grown revenues at over 20% since acquisition. In late September Greencore completed the acquisition of Uniq in the UK.

Grencore has also now completed the refinancing of its primary bank facility of £280 million for a five year term at competitive rates. The average debt maturity of the group at 30th September 2011 was 4.3 years compared to 2.0 years at September 2010.

“2011 has seen Greencore complete its transformation into a focused and growing convenience food business. Our underlying business continues to trade well,” comments Patrick Coveney, chief executive of Greencore. “The acquisitions that we made during the year in both the UK and US should be taken as a clear indication of our long-term strategy of supplementing organic growth with strategic corporate activity, and we are delighted with the way that the businesses are being quickly and efficiently integrated into the group. Whilst the UK and US food markets remain challenging, we are confident of being able to drive further growth and shareholder value through our close customer relationships, strong operational performance and outstanding products.”