Q1 Trading Statement

29 January 2019

Greencore Group plc

Encouraging start to FY19

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 28 December 2018 ("Q1" or "the quarter").

Q1 Trading¹

Convenience Foods UK & Ireland (Continuing operations)

Overall, the Group performed well against its organisational, commercial, operational and financial objectives in what were continued challenging trading conditions.

The Group achieved revenue from continuing operations of £363.5m in Q1. On a pro forma basis, excluding disposed sites and those that have ceased trading, revenue increased by 5.8% in the quarter, driven in particular by growth in food to go categories. Revenue decreased 5.7% on a reported basis.

Growth in Q1 was driven by the Group's activities in food to go categories, where both pro forma and reported revenue increased by 6.4%. Revenue in the rest of the Group's continuing operations increased by 4.7% on a pro forma basis in Q1, but decreased by 21.2% on a reported basis.

Discontinued Operations

The Group completed the disposal of its US business on 25 November 2018. Its performance in FY19 will be presented as discontinued operations. Reported revenue in discontinued operations was £172.8m in the period of ownership.

Group Cash Flow and Returns

The Group received the net proceeds from the disposal of its US business in Q1. The Group also repaid certain borrowings and relevant derivative financial instruments, ending the period in a net cash position.

Capital Management

In December 2018 Greencore announced its intention to return up to approximately £509m by way of a tender offer, at a price of 195 pence per ordinary share. Completion of the tender offer is conditional on shareholder approval at the Annual General Meeting today.

The Group also completed the refinancing of its primary debt agreements in January 2019. Following this refinancing, the Group has committed facilities of £462m with a weighted average maturity of 4.7 years.

Outlook

Greencore has made an encouraging start to the year. The Group reaffirms the outlook statement for continuing operations in the current financial year that was included in the FY18 results statement on 4 December 2018:

The Group anticipates continued underlying revenue growth in its key convenience food categories. Adjusted Operating Profit growth will be driven by this revenue growth, improved operational performance, and by a planned review of central overheads. Although the Group believes the risks from Brexit are manageable in the medium-term, the near-term challenges associated with a 'no withdrawal agreement' are uncertain. A strengthened balance sheet and strong underlying free cash generation leaves the Group well positioned to consider organic and inorganic investment consistent with its strategic and returns objectives. Over the medium term, the Group expects that its market positioning, capability set, customer profile, well invested asset network and proven economic model will generate strong growth, cash generation and returns.

The Group will report its FY19 Interim Results on 21 May 2019.

 

Conference Call

A conference call for investors and analysts will be held at 8.30am today.  Dial in details are below and a 7 day replay facility will be available afterwards at www.greencore.com.

Participants wishing to dial into the conference call can do so using the following details:

Ireland number:	+353 (0)1 506 0650
UK number:	+44 (0)844 481 9752
US number:	+1 646 741 3167
Confirmation code:	4168737

 

A replay of the presentation will be available on www.greencore.com and also through a 7 day conference call replay facility.

Ireland replay number:	+353 (0)1 553 8777
UK replay number:	+44 (0)844 571 8951
US replay number:	+1 917 677 7532
Replay code:	4168737

 

For further information, please contact:

Patrick Coveney	Chief Executive Officer	Tel: +353 (0) 1 486 3313
Eoin Tonge	Chief Financial Officer	Tel: +353 (0) 1 486 3316
Jack Gorman	Head of Investor Relations	Tel: +353 (0) 1 486 3308
Rob Greening or Sam Austrums	Powerscourt	Tel: +44 (0) 20 7250 1446
Billy Murphy or Louise Walsh	Drury | Porter Novelli	Tel: +353 (0) 1 260 5000

 

¹Pro forma references throughout this statement are on a constant currency basis. Pro forma revenue growth for continuing operations adjusts reported revenue to exclude sites disposed of and sites that have ceased trading including Hull, Evercreech and the ready meals manufacturing unit at Kiveton.

 

 

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, sushi, salads, chilled ready meals, chilled soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire Puddings.

On an annual basis, Greencore manufactures around 706 million sandwiches and other food to go products, 144 million chilled prepared meals, and 226 million bottles of cooking sauces, pickles and condiments. The Group carries out around 7,500 deliveries to stores each day.

Greencore has 15 world-class manufacturing sites in the UK, with industry-leading technology and supply chain capabilities. The Group employs approximately 11,300 people and is headquartered in Dublin, Ireland.

For further information go to www.greencore.com or follow Greencore on social media

This announcement is based on information sourced from unaudited management accounts.

Certain statements made in this Trading Update 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.  These forward-looking statements may generally, but not always, be identified by the use of words such as "will", "aims", "anticipates", "continue", "could", "should", "expects", "is expected to", "may", "estimates", "believes", "intends", "projects", "targets", or the negative thereof, or similar 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. You should not place undue reliance on any forward-looking statements.  These forward-looking statements are made as of the date of this Trading Update. The Group expressly disclaims any obligation to publicly update or review these forward-looking statements other than as required by law.