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Greencore 'Well Positioned' For The Future As FY Performance Stabilises

By Dayeeta Das
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Greencore 'Well Positioned' For The Future As FY Performance Stabilises

Convenience food firm Greencore Group said its performance for its financial year 2023 has stabilised, and the group is now well positioned for the future.

Greencore Group reported a 5.7% year-on-year increase to £76.3 million (€87.7 million) in adjusted operating profit, in the 52 weeks ended 29 September, driven by a strong performance in the second half.

Group revenue increased 10% to £1.9 billion (€2.2 billion), while adjusted EBITDA amounted to £132.8 million (€152.92 million) - up 4.6% year on year.

Commenting on the company's performance, chief executive officer Dalton Philips said, "In a challenging market environment, we have stabilised the business, and made good strategic progress. The group delivered above-market volume growth, despite exiting a number of low margin contracts.

"We also successfully mitigated and recovered the majority of our input cost inflation through effective operational and commercial initiatives."

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Annual Highlights

In full-year 2023, Greencore launched approximately 400 new or reformulated items within its total SKU range of over 1,600 products.

In January, it launched a series of new own-label brands in the vegan and health category with major retailers.

Revenue in the group’s 'Food to Go' categories, comprising sandwiches, salads, sushi and chilled snacking, amounted to £1.25 billion (€1.4 billion) and accounted for approximately 65% of reported revenue.

Reported revenue increased by 7.9% across these categories, driven by inflation recovery, in addition to volume growth in sandwiches and the contribution of new business wins, the company noted.

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The company also witnessed volume growth across the Food to Go Salads category, while the Side of Plate category saw weaker performances.

Revenue from the distribution of third-party products accounted for approximately 9% of group revenue in FY 2023, the company added.

Its Other Convenience categories reported revenue growth of 14.3% to £661.1 million (€761.3 million) during the financial year, driven by inflation recovery as well as volume increases across a number of categories.

Outlook

Philips stated, "The group continues to focus on improving profitability and is investing in a number of initiatives focused on both optimising our network and our IT infrastructure, to give us the platform for future growth.

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"Our stronger balance sheet provides the financial flexibility to underpin this growth. We are pleased with the start to the year and although it’s early days, the group remains confident in delivering FY24 within the range of current market expectations."

Recently, Greencore launched a new five-year sustainability-linked revolving credit facility (RCF) worth £350 million (€402.5 million).

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