Revenue rises 45% at Greencore

Shares in Greencore rose in London yesterday evening as the convenience food company pleased investors with full-year results ahead of expectations.

Greencore’s share price closed at 90.75 pence, having traded as high as 95 pence during the day, as the company posted a 37.3 per cent rise in operating profits to £70.7 million.

The company also announced that board member Gary Kennedy would succeed Ned Sullivan as chairman in January. Mr Sullivan held the position for 10 years.

Full-year results for the year ended September 28th, 2012, showed that revenue increased by 45 per cent to €1.16 billion.

While most of this increase reflected the acquisition of British food company Uniq, underlying revenue grew by 7.7 per cent.

About two-thirds of this underlying revenue increase was due to volume increase, with the remainder reflecting higher pricing.

Chief executive Patrick Coveney said the performance reflected a number of new customer wins and an expansion of exiting relationships with customers.

“The integration of Uniq has helped us to expand and develop our strong commercial relationships, while the cost synergies have been very strong ” he said, highlighting the strong performance of the company’s “food-to-go” division.

A 4 per cent rise in input costs was addressed by a combination of internal efficiencies, packaging and product solutions, and price and promotional activity, Mr Coveney said.

The company’s US business, which represents 10 per cent of revenue, was bolstered by two acquisitions during the year.

“We see an opportunity to deliver up to $350 million of revenues with existing customers from existing sites,” Mr Coveney said.

Greencore’s net debt figure outperformed market consensus, coming in between £30 million and £40 million lower than expected at £258 million, mostly due to better than expected working capital flow from Uniq.

Greencore’s pre-exceptional operating margin was 6.1 per cent, compared to 6.4 per cent the previous year, although the company said this had been expected following the acquisition of Uniq.

The company increased its final dividend payment to 2.5 pence per share, resulting in a total dividend of 4.25 pence per share for the year, a 25 per cent rise on the previous year.