Greencore revenues fall 34% amid Covid-19 crisis

Convenience food group Greencore said group revenue fell 34 per cent in the third quarter and more than 10 per cent in the year to date as its business struggled to recover from pandemic shutdowns.

However, there was “encouraging” improvement of demand in the third quarter and into the fourth quarter of its financial year, the company said.

Greencore also restarted production at three facilities, with production at its Northampton site extended.

The group, which supplies convenience foods mainly in the UK markets, saw revenue in its “food-to-go” category collapse 63 per cent in April as the shutdowns to slow the spread of coronavirus in the UK hit demand. That recovered gradually in May and June, with July 35 per cent behind prior periods.

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Group revenue for the third quarter, which ended June 26th, was £240.6 million, down 34.1 per cent, while in the year to date revenue fell 10.6 per cent to £953.3 million.

The food-to-go categories saw revenue decline 50.6 per cent to £123.8 million in the third quarter, with the nine months to the end of the third quarter showing a 16.9 per cent decline in revenue to £579.6 million.

Other convenience food categories showed a rise of 2.2 per cent in revenue over the third quarter to £116.8 million, and a 1.4 per cent increase over the nine-month period to £373.7 million. Adjusted earnings before interest, taxation, depreciation and amortisation were positive for the quarter, Greencore said.

However, the ongoing uncertainty around the pandemic has led to Greencore suspending its financial guidance for the fiscal year. The company is set to report its full year results on November 24th.

Category mix

"The decisive actions that we have taken are enabling us to keep our people safe, helping to feed the UK, and protecting our business," said chief executive Patrick Coveney.

“Our group has traded resiliently, with our deep customer relationships strengthened further, and we are encouraged to see a sustained improvement in demand and category mix.

“We remain confident in the relevance and attractiveness of the food-to-go channels and categories that we serve. In addition, we are well positioned for new business opportunities and a return to growth as the pandemic subsides.”

Separately, Greencore said it had reached a £15.6 million deal to sell its interests in its molasses trading businesses to United Molasses Marketing (Ireland) Limited and United Molasses Marketing Limited. The deal is subject to regulatory approval.