Greencore reported a "satisfactory" start to the year today (29 January) as acquisitions in the US offset flat UK revenues.
In a trading statement released ahead of its AGM, Greencore said that sales of at its convenience food business totalled GBP285.8m for the 13 weeks to end-December, a 2.5% increase on the comparable period of last year.
In the UK, Greencore said that like-for-like sales, stripping out the acquisition of International Cuisine and the disposal of the Uniq chilled dessert business, remained flat. The company highlighted that this was achieved in the face of "difficult" trading conditions and against difficult comparables, as the group booked 11.8% growth last year.
Meanwhile, the sandwich and dessert supplier has worked to expand its US activities. Sales in the market doubled during the period, benefiting from an expanded geographic footprint following the Marketfare Foods and Schau acquisitions. Greencore is also working to expand its customer base in the US and revealed today that it has started supplying Starbucks in the greater Boston area.
Greencore's ingredients and property division, which makes up about 6% of revenues, saw sales decline 11.6% in the period. Sales dropped to GBP13.1m at this division, the group indicated
Looking to the remainder of the year, Greencore said market conditions would continue to be challenging, particularly in the core UK market where volumes are under pressure. "We expect this to remain the case for the foreseeable future," the company said.
Greencore Group plc - Interim Management Statement
“A satisfactory start to the year”
Greencore Group plc (“the Group”) today issues its interim management statement for the period to 29 January 2013. Trading information relates to the 13 weeks trading period to 28 December 2012.
Current Trading
Convenience Foods
The Convenience Foods division recorded revenue of £285.8m for the 13 week period to 28December 2012, 2.5% higher than in the prior year in reported currency and 2.8% higher in constant currency. The revenue growth reflects both the contribution from acquisitions in the period but also the impact of business exited, notably in the former Uniq chilled desserts activity.
In the UK, revenue was in line with prior year on a like for like basis (that is excluding both the acquisition of the International Cuisine business acquired in August 2012 and the impact of the restructuring of the chilled desserts activity acquired as part of Uniq). This reflects both a challenging UK food market where growth rates across our categories have moved down in line with the overall market and also a tough comparator period in FY12 when theess recorded 11.8% growth in the 17 weeks to 27 January 2012.
The restructuring of the Uniq desserts business has now been completed. During the period, the Group announced that it had completed the disposal of its Chilled Desserts facility in Minsterley to the Müller Dairy UK Group.
In the US, revenues have more than doubled versus FY12 reflecting the acquisitions of MarketFare Foods and Schau partly offset by extensive portfolio rationalisation in the original business, principally at the Newburyport facility, in order to improve returns. The acquisitions have performed well in the period with underlying double digit revenue growth.
The business has also successfully commenced supply to Starbucks in the greater Bostonarea during January.
Ingredients and Property
The Ingredients and Property division, which represented 6% of Group revenues in FY12, recorded revenues of £13.1m, 11.6% lower than prior year in constant currency and 17.9%
lower than the prior year in reported currency. This was due to the phasing of orders and shipments and our view on the division’s potential financial delivery for the year remains unchanged.
Financial Position
The Group’s financial position remains robust with good headroom within existing debt facilities. The Group continues to manage cash tightly and remains focused on further de-everaging throughout FY13.
Board Composition
As previously announced, Mr Gary Kennedy will succeed Mr Ned Sullivan as Chairman after the Annual General Meeting to be held later today. Both Mr Sullivan and Mr Pat McCann will step down from the Board at the conclusion of the AGM. The Group also recently announced the appointment of two Non-Executive Directors, Ms. Heather Ann McSharry and Mr John Warren, with effect from 30 January 2013.