Greencore Announces Its Results For The Half Year Ended 31 March 2017

Strong volume growth in a transformational period

Greencore Group plc (‘Greencore’ or the ‘Group’), a leading manufacturer of convenience food in the UK and US, today issues its interim results for the 26 weeks ended 31 March 2017.

FINANCIAL HIGHLIGHTS¹

• Group revenue of £1,010.3m, up 46.1%
• Two new reporting segments created to reflect substantially changed company structure:
  • Convenience Foods UK & Ireland: revenue of £685.7m, up 16.1% as reported and up 10.6% on a pro forma basis²
  • Convenience Foods US: revenue of £324.6m, up 220.8% as reported and up 2.5% on a pro forma basis²
• Group EBITDA³ up 31.2% to £79.1m
• Group Operating Profit³ up 27.1% to £55.3m
• Group Operating Margin³ of 5.5%, down 80 bps as anticipated, due largely to the impact of significant commercial launches in the UK
• Adjusted Earnings⁴ up 13.2% to £37.8m, driven by higher Operating Profit partially offset by increases in both the Group’s financing charge and overall tax rate
• Adjusted EPS⁴ down 6.0% to 6.3 pence, with adjusted earnings growth offset by an increased number of shares as a result of the rights issue relating to the acquisition of Peacock Foods
• Net debt increased to £556.6m, largely reflecting the acquisition of Peacock Foods with net debt:EBITDA leverage as measured under financing agreements of 2.7 times. Debt maturities extended (weighted average maturity of 4.9 years)
• Interim dividend of 2.10 pence per share, representing a pay-out of 39.2% of adjusted earnings

STRATEGIC DEVELOPMENTS

• Continued strong growth in Food to Go in the UK driven by our ‘sole supply’ customer partnership model, with revenue up 19.7% on a pro forma basis in the period
• Significant capacity additions and commercial launches with key customers in the UK
• Successfully mitigating the impact of inflation in raw materials, packaging and labour
• Completed the acquisition of Peacock Foods at the end of December 2016, transforming the Group’s US business
• Strong volume growth of 9% in Peacock Foods on a pro forma basis in the period
• Good progress with the integration, customer launches and commercial pipeline development in the combined US business
• Organisation strengthened to reflect expanded portfolio

Commenting on the results, Patrick Coveney, Chief Executive Officer, said:

“This has been a transformational period for Greencore following the acquisition and integration of Peacock Foods in the US. Against a backdrop of considerable change across the Group, we are pleased to be reporting strong revenue and profit growth for the first half of the year. In the UK, we have delivered significant expansion and investment following recent new long-term business wins, as our Food to Go business continues to grow rapidly. In the US, the addition of Peacock Foods has transformed our market and channel position and has given us a growth platform of real scale. The enhanced capabilities, product offerings, and customer relationships that have been added to the Group in a short space of time, combined with the strength of our underlying business, mean that we are confident of making further progress in FY17 and beyond.”

Click here to read the full statement.