Greencore has updated its full-year guidance following a strong financial and operational performance in the third quarter of the 2024 financial year, it was reported today.
The Dublin-headquartered company updated its FY24 Adjusted Operating Profit to £88-90 million, ahead of previous guidance of £86-88 million, and ahead of current market expectations.
Success in the quarter – the 13 weeks ending 28 June 2024 – was underpinned by outstanding customer service and continued improved profit conversion, year on year.
The overall quarter reported a revenue decrease of 6.1%, to £465.2 million, reflecting the year-on-year impact of Greencore’s exit from a number of low-margin contracts in the 2023 financial year.
It also reflected the disposal of the Trilby Trading business.
Despite this decrease, on a like-for-like basis, Q3 revenues increased by 1.4%, year on year.
Categories
Reported revenue in food-to-go categories decreased by 1.5%, to £330.2 million – an increase of 2.4% on a like-for-like basis.
Similarly, reported revenue in other convenience categories was £135 million – a decrease of 15.7%, year on year, but just a 1.1% decrease on a like-for-like basis.
The company saw a broadly flat like-for-like volume performance in the sandwich category against an overall market decline of 1%.
This was in addition to a positive like-for-like volume performance across other key categories, including chilled ready meals and cooking sauces.
The sushi category experienced like-for-like volume growth in the quarter, although the salad category was more challenged.
Profit conversion continued to improve, year on year, from ongoing commercial, operational and cost initiatives.
Product launches in the quarter included a number of premium food-to-go categories, as well as a range of cooking sauces across standard and premium tiers, for which Greencore won an Innovation Supplier of the Year award.
The group maintained focus on operational initiatives aimed at deploying best-practice learning during the third quarter, with continued focus on the effective use of labour and waste reduction.
It also generated strong underlying free cash in Q3, as a previously announced £30 million share buy-back is ongoing and progressing well.
As part of a previously announced £50 million return to shareholders, the board also intends to declare a dividend for the year to September 2024.
‘Tough Comparative Period’
Commenting on the results, Greencore’s chief executive, Dalton Philips, said, “Q3 represents another excellent performance by the business against a tough comparative period.
“Our continued progress has been delivered through ongoing impactful operational and commercial initiatives, which we are continuing to implement at pace, supporting the improved profit conversion in the quarter.
“Providing fresh and healthy foods to our customers and consumers each and every day is our core purpose, and our performance has once again been supported by our outstanding operational service levels, at over 99%.
“Delivering at this level alongside ongoing business improvement is not easy, and I would like to thank my colleagues across the group for their hard work.”
“While Q4 remains a seasonally important trading period, our continued strong profit conversion performance means we now expect to deliver a full-year adjusted operating profit of £88-90 million, ahead of previous guidance and market expectations.”
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