Convenience foods firm Greencore has reported a 'marked reduction' in demand for its food to go categories in the UK, since the British government escalated measures to combat the coronavirus outbreak on 24 March.
In a statement, Greencore said that this slump has been partially offset by 'sustained volume growth' in its other convenience categories.
The business said that it is taking 'prudent measures' to protect profitability and cashflow, by tightening its food to go production network, and seeking to eliminate non-essential operating costs.
The group's board and executive directors are to take a 30% reduction in fees and base salary for a period of three months, with its wider group leadership team taking a 20% salary cut.
It has also announced the suspension of financial guidance for FY20, adding that the group's outlook for the year, which was included in its full-year 2019 results statement and Q1 trading update should no longer be considered current.
'While the duration and impact of this pandemic remains uncertain, all of our stakeholders are continuing to work together to protect the business,' Greencore said in a statement.
'The board is ensuring that Greencore remains a purposeful and hugely relevant business, feeding the UK right through this period, and importantly that it is also equipped with the team, strategy, reputation and balance sheet to accelerate forward when the pandemic passes.'
Greencore also said that it is working alongside the NHS and local communities to ensure a supply of freshly prepared foods to frontline workers during the pandemic.
Commenting on the group's statement, analyst Clive Black of Shore Capital said, "Cost reduction and the suspension of investment projects should, in our view, noting that it remains a materially trading entity, ensure that Greencore has sufficient liquidity and so remain a firmly solvent business, to face into whatever commercial life is going to be after Coronavirus.
"In this respect, to us Greencore is doing the right things, retaining close contact with its key clients and lenders and facing into the rapidly evolving market with focus and agility. Such steps should, we believe, place it well for when much aspired normality ensues."
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.