Greencore PLC: Announces Q4-2021 Trading Update

Dublin / IE. (gg) Greencore Group PLC, a leading manufacturer of convenience food in the UK, issues a trading update for the fourths quarter and the full year ended 24 September 2021, ahead of the publication of its full year results on 30 November 2021.

Highlights

  • There has been further improvement in revenue, profitability, and cash flow momentum during Q4, supported by a continued increase in demand for food to go categories and strong execution on new business wins
  • Revenue trends continued to recover through Q4, with Group pro forma revenue 27 percent above Q4 20 levels and 1 percent above equivalent pre-Covid levels in Q4 19. For the full year, the Group anticipates a reported revenue outturn of approximately GBP 1,320m
  • The Group expects to generate an FY-2021 Adjusted Operating Profit outturn towards the upper end of previous guidance of between GBP 36m and GBP 40m
  • The Group also expects Net Debt (excluding lease liabilities) at year end to be below GBP 190m, an improvement on previous guidance of below GBP 240m. Strong free cash generation continued in the final quarter. Working capital inflows were supported by increased volumes and from the timing benefit of an early year end date. There was an adjustment to the phasing of some capital expenditure projects into early FY-2022, and the disposal of an investment property for approximately GBP 7m was also completed. Net Debt:Ebitda, as measured under financing agreements, is expected to be below 2.2x
  • Good progress was made on the Group’s sustainability objectives, in particular the launch of fully recyclable, plastic free sandwich skillet trials for customers in September 2021

Outlook

  • The Group is encouraged by the progress seen in the final quarter of FY-2021
  • While the well documented supply chain and labour challenges persist across the UK food industry, the Group is working closely with customers and suppliers to mitigate the impact and to deliver strong operational service levels
  • The Group is also engaging intensively with customers to recover input cost and other inflation
FY-2021 Pro Forma Revenue Growth
Versus FY-2020 Versus FY-2019
Q4 FY Q4 FY
Group +27% +6% +1% -9%
Food to go categories +37% +9% -2% -16%
Other convenience food categories +8% +2% +10% +4%

Chief Executive’s Commentary

Commenting on the performance, Patrick Coveney, Chief Executive Officer, said: «We are pleased with the further improvement in our business in the fourth quarter, in particular the increase in demand across the business and our strong underlying cash generation. I am also excited by the progress we have made in the past quarter on our sustainability journey including the launch of the first fully recyclable, plastic free sandwich skillet. None of our progress would have been possible without the energy and dedication of our teams and colleagues who, as throughout the COVID pandemic, continue to do a fantastic job. Greencore has a strong position in the dynamic UK convenience food market and, looking forward, we remain confident in our medium-term prospects.»