Resilient H1 performance in challenging trading conditions
Well positioned as food to go volumes rebound in a reopening UK economy
Greencore Group plc (‘Greencore’ or the ‘Group’), a leading manufacturer of convenience food in the UK, today issues interim results for the 26 weeks ending 26 March 2021.
PERFORMANCE1
- Group Revenue declined 19.0% to £577.1m, driven by the reduction in consumer mobility as a result of tiered restrictions and lockdowns in the UK
- Adjusted Operating Profit of £0.2m and Adjusted Loss per share of 1.4 pence
- Net Debt (excluding lease liabilities) of £271.3m at 26 March 2021, a reduction of £79.2m since the end of FY20 and underpinned by an equity placing in November 2020 raising gross proceeds of £90m
- Strong liquidity position with cash and undrawn committed debt facilities of £302.0m at period end, and H1 21 Net Debt: EBITDA covenant waived
STRATEGIC DEVELOPMENTS
- Working with several key customers to renew and extend relationships with near term investments in capabilities, capital, and commercial terms that secure and support growth in new and existing categories and formats
- Recent revenue momentum supported by new business wins secured during the last 12 months representing annualised pre-COVID revenues of approximately £175m, facilitated in part by a two year capital investment of approximately £30m across three manufacturing sites
- A pipeline of further new business opportunities being actively pursued
- Comprehensive range of pledges launched as part of the Group’s sustainability strategy
OUTLOOK1
- Encouraging revenue momentum in the first seven weeks of H2 21, with pro forma revenue in food to go categories running at approximately 123% above prior year levels and approximately 14% below the equivalent pre-COVID levels in FY19. For this period the Group’s pro forma revenue was approximately 64% above prior year levels and approximately 5% below equivalent pre-COVID levels in FY19
- The Group anticipates that a continued reopening of the UK in line with the current roadmap and a consequential rebuild of Group Revenue would be expected to generate a FY21 Adjusted Operating Profit outturn above FY20 levels
- Net Debt (excluding lease liabilities) is expected to reduce further in the second half of the year, from H1 21 levels
- The Group is now focused on rebuilding profitability and cash flow momentum to pre-COVID levels, supported by the revenue rebuild, the unwind of COVID-19 operating constraints, and effective execution against new business opportunities
SUMMARY FINANCIAL PERFORMANCE1
| H1 21 | H1 20 | Change | |
| £m | £m | ||
| Group Revenue | 577.1 | 712.7 | -19.0% |
| Pro Forma Revenue Growth | -18.6% | ||
| Adjusted EBITDA | 26.5 | 63.8 | -58.5% |
| Group Operating Profit | 3.9 | 35.6 | -89.0% |
| Adjusted Operating Profit | 0.2 | 38.3 | -99.5% |
| Adjusted Operating Margin | 0.0% | 5.4% | -540bps |
| Group (Loss)/Profit Before Tax | (1.8) | 27.3 | -106.6% |
| Adjusted (Loss)/Profit Before Tax | (7.9) | 31.1 | -125.4% |
| Basic EPS (pence) | 0.0 | 5.3 | -100.0% |
| Group Exceptional Items (after tax) | 9.9 | 0.4 | |
| Adjusted EPS (pence) | (1.4) | 5.8 | -124.1% |
| Interim dividend per share (pence) | – | – | |
| Free Cash Flow | (23.6) | 2.6 | -£26.2m |
| Net Debt | 332.1 | 374.4 | |
| Net Debt (excluding lease liabilities) | 271.3 | 311.1 | |
| Net Debt:EBITDA as per financing agreements | 7.2x | 2.1x | |
| Return on Invested Capital (“ROIC”) | (0.6)% | 12.3% |
Commenting on the results, Patrick Coveney, Chief Executive Officer, said:
“This has been a challenging period for Greencore, but the consistent build in our revenues since early March as lockdown measures have eased and COVID-19 cases have fallen give us real cause for optimism. Our focus now is on rebuilding revenue, profitability and cash flow momentum as the UK economy reopens. Our recent business wins are a great endorsement of our continuing relevance in the UK convenience food landscape. Underpinned by the quality of our people, our new sustainability strategy and the strength of our long-standing customer relationships, we are confident of being able to build back the business rapidly and profitably, and are optimistic about the medium-term prospects for Greencore.”
