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RNS Number : 4087C
Greencore Group PLC
11 October 2022
11 October 2022
Greencore Group plc
Full Year and Q4 Trading Update for the Year ended 30 September
2022
Satisfactory year on year earnings progression and further
deleveraging
Greencore Group plc ("Greencore" or the "Group") a leading
manufacturer of convenience foods in the UK, today issues a trading
update for Q4 and the full year ended 30 September 2022, ahead of
the publication of its full year results on 29 November 2022.
Highlights (1, 2)
-- Progressive year on year improvement in revenue, Operating
Profit and deleveraging, supported by continued volume growth and
significant recovery of inflation
-- FY22 reported revenue of approximately GBP1.7bln (FY21: GBP1.3bln)
-- FY22 Adjusted Operating Profit and Adjusted EPS at the lower
end of the respective ranges of GBP72-GBP77m and 9.2p-10.0p (given
in the Q3 22 update on 26 July) after absorbing the impact on
volume and operations of rail strikes and the unscheduled bank
holiday in September 2022
-- Strong cash conversion resulting in Net Debt (excluding lease
liabilities) of approximately GBP180m (2021: GBP183m) at year end
after GBP30m strategic capex and most of the GBP10m share buyback,
with Net Debt:EBITDA, as measured under financing agreements,
approaching the Group's target range of 1.0x - 1.5x
-- Q4 Pro-forma revenue 25% up year on year due to the impact of
inflation recovery and new business wins
Pro Forma Revenue
Growth
--------------------
Q4 FY22
Versus Versus
Q4 2021 FY21
---------- --------
Group 25% 29%
---------- --------
Food to go categories 23% 35%
---------- --------
Other convenience food
categories 29% 19%
---------- --------
Trading Performance
Pro forma revenue growth in Q4 22 of 25% year on year is driven
by a combination of increased volumes, a low-teen percentage
increase in underlying pricing, the onboarding of new business in
ready meals and increased revenue in the Group's Irish ingredients
trading business.
Q4 22 revenue growth of 23% in food to go categories is lower
than Q3 22 due to a stronger comparative period, the volume impact
of rail strikes and the unexpected bank holiday, and the full year
effect of new business wins in Q4 21. In Q4 22, we completed the
onboarding of new business enabled by the GBP30m strategic capital
investment across three manufacturing sites.
For the full year, we have delivered good year on year volume
growth while recovering significant levels of ongoing inflation and
enhancing profit and cash conversion. Group pro forma revenue has
increased 29% year on year with a 35% increase in food to go
categories reflecting volume growth, the onboarding of new business
and the impact of inflation recovery.
Adjusted Operating Profit will be at the lower end of the range
of GBP72-GBP77m (given in the Q3 22 update on 26 July) after
absorbing the impact on volume and operations in Q4 22 of rail
strikes and the additional September bank holiday.
We have also retained our focus on tight cashflow management
delivering an absolute reduction in Net Debt year on year at the
same time as delivering our share buyback programme. Net debt was
approximately GBP180m at the end of the financial year marginally
down from GBP183m in 2021. Leverage is now approaching our target
range of 1.0x to 1.5x.
The GBP10m share buyback programme that commenced on 26 July
2022, the first phase of our previously announced GBP50m value
return to shareholders over the coming two years, has now been
completed, as announced on 7 October 2022.
Outlook
We closely monitor the impact of the UK macroeconomic
environment on consumer sentiment and demand in our categories. We
don't currently see an impact as consumer demand has held up well,
however we remain watchful and cautious about the potential impact
of cost-of-living factors through the year ahead.
We remain focused on the recovery of inflation through all
mechanisms available and are working with our customers and supply
partners to mitigate the ongoing impact of the persistently high
inflation across the industry on consumer prices. We have
substantially recovered the inflation that we have experienced over
the last 12 months, and we are making decisions whether to bid for
or renew contracts based on their economics, including the ability
to recover inflation.
We remain focused on execution of our Better Greencore
efficiency programme and continue to plan for the second phase
which focuses on output optimization and efficiency.
For further information, please contact:
Dalton Philips Chief Executive Officer Tel: +353 (0) 1
486 3326
Emma Hynes Chief Financial Officer Tel: +353 (0) 1
486 3307
Rob Greening/Nick Hayns Powerscourt Tel: +44 (0) 20
7250 1446
Billy Murphy / Claire Drury | Porter Novelli Tel: +353 (0) 87
Rowley 231 3085) / +353
(0)87 269 5014
(1) Unaudited
(2) Pro forma references throughout this statement are on a
constant currency basis and exclude the impact of the 53(rd) week
in 2022.
About Greencore
Greencore is a leading manufacturer of convenience food in the
UK. It supplies grocery and other retailers including all of the
major UK supermarkets. The Group has 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.
For further information go to www.greencore.com or follow
Greencore on social media.
Financial information relating to Greencore Group plc in this
announcement are not statutory financial statements within the
meaning of Section 340 of the Companies Act 2014 of Ireland and
have been published for the purposes of updating investors on
financial performance for the periods referenced in this
announcement. The statutory financial statements for the year ended
29 September 2022 have not been prepared or reported on by the
statutory auditors, and are expected to be delivered to the
Registrar of Companies of Ireland within 28 days of [
February].
Certain statements made in this announcement 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
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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. 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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