TIDMGNC
RNS Number : 7717Z
Greencore Group PLC
27 January 2022
27 January 2022
Greencore Group plc
Q1 revenue back above pre-COVID levels; FY22 guidance
maintained
Greencore Group plc ("Greencore" or the "Group"), a leading
manufacturer of convenience foods in the UK, today issues a trading
update covering the 13 weeks to 24 December 2021 ("Q1" or "the
quarter").
Q1 Trading(1)
Revenue Growth Growth (versus
(versus Q1 21) Q1 19)
GBPm Reported Pro forma Pro forma
-------- --------- ---------- ---------------
Group 389.0 +24.4% +26.4% +7.5%
-------- --------- ---------- ---------------
Food to go categories 254.3 +34.9% +34.9% +6.1%
-------- --------- ---------- ---------------
Other convenience
food categories 134.7 +8.5% +13.1% +10.3%
-------- --------- ---------- ---------------
PERFORMANCE(1)
-- Group reported revenue increased by 24.4% year on year,
driven by strong growth in food to go categories and
notwithstanding some limited impact on demand from the emergence of
the Omicron COVID-19 variant in the UK during December. Pro forma
revenue grew by 26.4% year on year and was 7.5% above equivalent
pre-COVID levels in Q1 19
-- Pro forma revenue in food to go categories increased by 34.9%
year on year and was 6.1% above equivalent pre-COVID levels in Q1
19. The underlying recovery in food to go categories continued in
the period, and was augmented by the onboarding of new business
wins, continued growth in the distribution component of the Group's
business, and the emerging impact of inflation
-- Pro forma revenue growth in other convenience categories was
13.1% year on year and 10.3% above equivalent pre-COVID levels in
Q1 19
-- In the quarter the Group continued to progress well with the
recovery of input cost and other inflation with customers. The pace
of profit conversion continued to be impacted by industry wide
supply chain and labour challenges
STRATEGIC DEVELOPMENTS
-- The Group is on track with its strategic capital investment
programme of approximately GBP30m across three existing
manufacturing sites, to support the delivery of previously
announced business wins. Revenue from these wins is anticipated to
begin in the second half of FY22
-- The return to pre-COVID volume levels has enabled the Group
to revitalise its Excellence cost efficiency programmes across
operational and commercial functions. These programmes enable the
Group to optimise capacity utilisation, enhance process engineering
and make further progress with automation initiatives. This will be
augmented by an extensive review of costs across the Group that
will also drive the recovery in profit conversion from the growing
revenue base. More detail will be provided on this review in the
Group's H1 22 Results
-- In November 2021 the Group further strengthened its balance
sheet when it extended the maturity on its GBP340m revolving credit
facility by one year to January 2026. This increased the weighted
average maturity of the Group's total committed debt facilities to
3.4 years, from 2.7 years at the end of FY21
-- The Group continued to advance its sustainability agenda in
Q1, including increasing engagement with suppliers on carbon
intensive ingredients and progressing plans to transparently share
data on the health and sustainability profile of its products with
stakeholders
-- The Group has also introduced a new share ownership scheme
for all colleagues, details of which are provided in a separate
announcement this morning
-- The search process to appoint a new CEO is ongoing and an
update on the appointment will be provided in due course
OUTLOOK(2)
-- The uncertainty regarding the duration and impact of COVID-19
variants on the Group's trading environment, particularly on demand
in its food to go categories, has made it more difficult to predict
FY22 performance. To date, there has been some impact on the
Group's revenue momentum in what is its seasonally quieter period
of the year. The Group welcomes the UK Government's recent
announcement to ease the 'Plan B' restrictions on mobility arising
from the Omicron COVID-19 variant
-- The Group is committed to the recovery of input cost and
other inflation with customers, with the scale of this inflation
increasing again in recent months. Supply chain and labour
challenges remain elevated across the UK food industry, exacerbated
by the impact of the Omicron COVID-19 variant
-- Though these challenges persist, the Group continues to
anticipate a FY22 outturn in line with market expectations. This
assumes no material resumption of mobility restrictions or
lockdowns arising from increasing COVID-19 infection rates in the
UK. Profitability will be heavily weighted towards the seasonally
important second half of the year
-- The Group is focussed on further deleveraging the balance
sheet in FY22. The Board also remains committed to recommencing
value return to shareholders in FY22
-- Greencore will report its H1 22 results on 24 May 2022
Commenting on the performance, Gary Kennedy, Board Chair,
said:
"I am encouraged by the progress that we have made during Q1 in
what continued to be a challenging trading environment. We remain
focused on rebuilding our economic model effectively and
sustainably with all stakeholders, thereby positioning the company
for a strong future."
For further information, please contact:
Emma Hynes Chief Financial Tel: +353 (0)
Officer 1 486 3307
Jack Gorman Head of Investor Tel: +353 (0)
Relations 1 486 3308
Rob Greening/ Nick Hayns/ Powerscourt Tel: +44 (0)
Sam Austrums 20 7250 1446
Billy Murphy/ Louise Walsh Drury Communications Tel: +353 (0)
1 260 5000
Conference Call
A conference call for investors and analysts will be held at
8.30am on 27 January 2022. Registration and dial in details are
available at www.greencore.com/investor-relations/
(1) Pro Forma Revenue Growth presents reported revenue on a
constant currency basis. For the comparative pro forma revenue
periods used for Q1 21, Q1 20 and Q1 19, reported revenue has also
been adjusted for the impact of acquisitions and disposals during
those periods.
(2) Consensus market expectations as compiled by Greencore from
available analyst estimates on 13 January 2022 and as reported in
the Investor Relations section of the Group website.
About Greencore
We are a leading manufacturer of convenience food in the UK and
our purpose is to make every day taste better. We supply all of the
major supermarkets in the UK. We also supply convenience and travel
retail outlets, discounters, coffee shops, foodservice and other
retailers. We have strong market positions in a range of categories
including sandwiches, salads, sushi, chilled snacking, chilled
ready meals, chilled soups and sauces, chilled quiche, ambient
sauces and pickles, and frozen Yorkshire Puddings.
In FY21 we manufactured 645m sandwiches and other food to go
products, 117m chilled prepared meals, and 256m bottles of cooking
sauces, pickles and condiments. We carry out more than 10,500
direct to store deliveries each day. We have 21 world-class
manufacturing units across 16 locations in the UK, with
industry-leading technology and supply chain capabilities. We
generated revenues of GBP1.3bn in FY21 and employ approximately
13,000 people. We are headquartered in Dublin, Ireland.
For further information go to greencore.com or follow Greencore
on social media.
Forward--looking statements
This announcement is based on information sourced from unaudited
management accounts.
Certain statements made in this document are forward--looking.
These represent expectations for the Group's business, and involve
known and unknown risks and uncertainties, many of which are beyond
the Group's control. The Group has based these forward--looking
statements on current expectations and projections about future
events based on information currently available to the Group. These
forward-looking statements include all statements that are not
historical facts and may generally, but not always, be identified
by the use of words such as 'will', 'aims', achieves',
'anticipates', 'continue', 'could', 'develop', 'should', 'expects',
'is expected to', 'may', maintain', 'grow', 'estimates', 'ensure',
'believes', 'intends', 'projects', 'sustain', 'targets', or the
negative thereof, or similar future or conditional expressions.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future and reflect
the Group's current expectations and assumptions as to such future
events and circumstances that may not prove accurate. A number of
material factors could cause actual results and developments to
differ materially from those expressed or implied by
forward-looking statements. There may be risks and uncertainties
that the Group is unable to predict at this time or that the Group
currently does not expect to have a material adverse effect on its
business. You should not place undue reliance on any
forward-looking statements. These forward-looking statements are
made as of the date of this announcement. The Group expressly
disclaims any obligation to publicly update or review these
forward-looking statements other than as required by law.
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END
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