Irish food group Greencore has experienced a significant increase in profits for the six months ending March 29. Adjusted pre-tax profits surged to £16.9m (€19.8m), marking a remarkable 397.1% rise from the corresponding period in the previous financial year. Group operating profit for the period reached £25.3m, a substantial increase from £3.6m a year earlier, despite a 6.4% decline in half-year revenues to £866.1m.
Greencore attributed the sales decrease to its strategic decision to exit low-margin contracts from the previous financial year and the sale of Trilby Trading last summer. However, this decline was partly offset by price increases and volume growth during the period. The company anticipates an adjusted operating profit of £86m-£88m, surpassing current market expectations.
While inflation has eased across the group, Greencore noted ongoing rises in labor costs. The company introduced 184 new products in the first half of the financial year, witnessing heightened demand for premium product ranges and affordable family foods.
Greencore focused on enhancing performance across its manufacturing footprint and plans to consolidate its soups business into a single site in Bristol. Additionally, a new significant ready-meals contract was secured, with production set to commence at its Kiveton site by year-end.
In a bid to return £50m to shareholders, Greencore is launching a £30m share buyback program. The company’s board intends to declare a dividend for the year ending September if business performance remains on track.
Chief Executive Dalton Philips expressed optimism about the company’s accelerating financial performance, emphasizing efforts to drive profitability and returns. Greencore is collaborating with major retail customers to develop new products, particularly in the food-to-go segment, outpacing market growth.
Greencore, headquartered in Dublin, reported revenues of £1.9bn in the previous financial year. With 16 manufacturing sites and 17 distribution sites in the UK, the company employs approximately 13,600 individuals.
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