June 2016: Patrick Coveney, CEO, Greencore

Under Patrick Coveney’s directorship, Greencore continues to perform strongly with revenue increases across the board.

Greencore has so far performed strongly again this year. Convenience foods sales growth of 8.7% have been recorded. Group revenues increased by 8.1% year-on-year to £691.6m, while operating profit increased by 8.5% £43.5m. Adjusted EPS increased by 7.9% and net debt at period-end was £316m (year-end FY 2015 £265.5m).

Commenting on the results, Patrick Coveney, chief executive officer, said: “Greencore has performed strongly in the first half of the year. Our strategy of focusing on the UK and US ‘food to go’ markets is working well and we are continuing to invest in capacity and capability initiatives to support the substantial future growth pipeline. We are confident of further progress in the months and years ahead.”

According to Greencore’s half yearly financial report for the half year ended 25th March 2016, strong revenue growth is being driven by the food to go businesses and that the operating profit growth of 8.5% and margin has been maintained despite pressure from start-up costs and capability investments.

TRENDS

Coveney also maintains that this growth is underpinned by positive long-term trends such as: convenience; health and freshness; customer brand focus; Greencore’s product investment model; a more collaborative approach across the supply chain and a sustained focus on productivity and cost efficiency.

For example, the food to go businesses recorded exceptional revenue growth of 13.1%, vs. market growth of 5.6%. This area of the business has also rolled out several new customer contracts and significant investments in capacity, distribution and capability.

In the prepared meals division, Greencore recorded revenue growth of 1.6% attributed to the renewal of a number of key commercial relationships. And in the grocery segment revenue grew by 1.7%.

STRATEGY

The vision and strategy of Greencore is to be a fast growing international convenience food leader. The Group’s focus on growing its position in the food to go segment in the UK and US continues to bear fruit with strong like for like revenue growth across the food to go businesses in H1 2016 of 12.7%.

Over the last two years, the Group has increased capital expenditure on manufacturing capacity to support the double-digit growth profile of its food to go activity.

In addition, Greencore is also investing in its IT and distribution infrastructure, as well as in enhancing its capability both to sustain customer service and to develop a scalable model for the future.

We have delivered strong revenue growth and have continued to build the pipeline of future growth opportunities

Given these results it is apparent that the Group continues to perform well, while also managing significant levels of change associated with its capacity and capability investment programmes.

“We have delivered strong revenue growth and have continued to build the pipeline of future growth opportunities,” Coveney said. “The level of project activity within our business will remain high as we commission new production capacity in several sites across the UK and also in Seattle.”

Coveney also highlighted that the UK backdrop is expected to remain uncertain given the changing nature of the grocery industry and other economic headwinds [Brexit]. “Notwithstanding these investments and uncertainties, we remain confident in our ability to deliver performance in line with market expectations,” he added.