UK convenience manufacturer Greencore said it has been negatively impacted due to rail strikes, the unexpected bank holiday and inflation, but “delivered good year-on-year volume growth” in its latest trading update.
Greencore supplies a range of chilled, frozen and ambient foods to retail and food service customers in the UK.
The company recorded revenue growth of 23% across its food-to go-categories in the fourth quarter (Q4) of this year, which was lower than the figures recorded in Q3. It said that this was due to a stronger comparative period, the volume impact of rail strikes, the unexpected bank holiday and the full year effect of new business wins in Q4 of 2021.
For the full year, Greencore said it has “delivered good year-on-year volume growth while recovering significant levels of ongoing inflation and enhancing profit and cash conversion.”
Group pro forma revenue has increased 29% since 2021, with a 35% increase in food-to-go categories. Greencore added that these increases reflect volume growth, the onboarding of new business and the impact of inflation recovery.
The Group said that its adjusted operating profit will be at the “lower end of the range” of £72 to £77 million, after absorbing the impact of rail strikes and the additional September bank holiday in Q4 this year.
Its report said that the manufacturer has retained its “focus on tight cashflow management, delivering an absolute reduction in net debt year-on-year; at the same time as delivering [its] share buyback programme.” Its net debt was £180 million at the end the 2022 financial year, down from £183 million in 2021.
Outlook for 2023
Greencore said: “We closely monitor the impact of the UK macroeconomic environment on consumer sentiment and demand in our categories. We don’t currently see an impact as consumer demand has held up well, however we remain watchful and cautious about the potential impact of cost-of-living factors through the year ahead.
“We remain focused on the recovery of inflation through all mechanisms available and are working with our customers and supply partners to mitigate the ongoing impact of the persistently high inflation across the industry on consumer prices.
“We have substantially recovered the inflation that we have experienced over the last 12 months, and we are making decisions whether to bid for or renew contracts based on their economics, including the ability to recover inflation.”
