Convenience food group Greencore saw its share price climb nearly 4% this morning (27 November) after booking an increase in full-year profits
Net profit soared 79.8% to GBP35.6m (US$57m) on the back of its acquisition of Marks and Spencer food supplier Uniq last year. Adjusted earnings jumped 70.9% to GBP49.2m.
Group operating profit was up 37.3% to GBP70.7m, reflecting the firm's acquisition activity and business momentum, it said. Revenues grew 44.5% to GBP1.16bn.
Greencore also cited the establishment of a food-to-go business in the US following the acquisitions of MarketFare Foods and Schau, and the completion of a supply agreement with Starbucks.
Following an "extensive reshaping" of its portfolio of businesses over the last three years, the group said it is now "well positioned as a focused and growing private-label convenience foods business" in the UK and the US.
It added market conditions remain "challenging" with pressure on like-for-like volume in the UK, "little economic growth" and a consumer under "considerable financial pressure". However, it said it remains "well positioned to deliver further progress in FY13 and beyond".
Greencore shares were up 3.4% at 94 pence at 08:34 GMT.
Show the press release
GREENCORE GROUP PLC
FULL YEAR RESULTS STATEMENT
STRONG PERFORMANCE DESPITE CHALLENGING MARKET CONDITIONS
27 November 2012
Greencore Group plc, a leading international convenience food producer, today issues its results for the year ended 28 September 2012.
HIGHLIGHTS
· Growth of 44.5% in reported revenue to £1,161.9m, due to acquisition activity and business momentum;
· Revenue from Convenience Foods continuing activity1 of £1,036.9m, up by 11.2% or 7.4% excluding the impact of
acquisitions in the year, despite challenging market conditions;
· Group operating profit2 up 37.3% to £70.7m, reflecting the acquisition activity and business momentum;
· Group operating margin of 6.1%, an expected 30 bps decline resulting from the incorporation of Uniq;
· Adjusted earnings3 of £49.2m, up 70.9% and adjusted EPS3 of 12.8p, up 21.9%;
· Net Debt of £258.0m, resulting in a net debt: EBITDA leverage of under 2.5 times on the basis of calculation used
under our financing arrangements;
· Proposed final dividend of 2.5 pence per share, giving a total dividend of 4.25 pence per share;
· Uniq integrated with delivery in line with our business case;
· Established a scale food to go focused business in the US following the acquisitions of MarketFare Foods, LLC
("MarketFare") and H.C. Schau & Son, Inc. ("Schau") and signed a supply agreement with Starbucks
Commenting on the results, Patrick Coveney, Chief Executive Officer, said:
"2012 has been a breakthrough year for Greencore. The acquisition of Uniq has reshaped the performance, scale, capability and long-term prospects of our Group, with all elements of the targeted benefits now delivered. More broadly, our strategy, enlarged portfolio and team are working well as we continue to build out industry leading convenience food businesses in the UK and increasingly in the US. The Group delivered revenue growth of 45%, with like-for-like Convenience Foods revenues up 7.4% despite challenging market conditions. Operating profits, adjusted earnings and EPS were up 37%, 71% and 22% respectively and strong after tax cash flows have reduced leverage to below 2.5 times, even after acquisition activity. Despite increasingly challenging consumer conditions, little industry growth, and increasing levels of retailer competition, Greencore remains well positioned to deliver further progress in FY13 and beyond."
