Greencore eyes ‘significant’ UK growth opportunities

Food-to-go giant Greencore has set its sights on “significant” growth through expansion and acquisition in the UK following the disposal of its US division.

The comments were made by Greencore chief executive Patrick Coveney as the company announced a 4.2% year-on-year increase in full-year revenue to £1,498.5m, with adjusted EBITDA up 1.7% to £140m.

The performance had been driven by a 10.8% increase in food-to-go (sandwiches, sushi and salads), with Greencore saying it was playing an increasing role in supporting customer growth in new channels, formats and product types.

It reported that improved profits in food-to-go categories had been partly offset by a decline in other areas, particularly ready meals.

The business last week completed the sale of its entire US operation to an affiliate of Hearthside Food Solutions in a deal worth $1bn (£817m). This followed Greencore exiting the UK desserts sector with the sale of its cakes and desserts business in Hull to Bright Blue Foods and the closure of its desserts facility in Evercreech, Somerset.

“2018 was a year of significant change for Greencore. We delivered good underlying growth in the UK, with favourable consumer and retailer trends helping drive our core food-to-go business,” said Coveney.

“We will now focus all our attention and resources on the significant growth opportunities that we see in the UK, both organic and inorganic.”

Among the growth opportunities identified by the business were the demand for fresh, local convenient food; broadening the reach of food-to-go; moving into adjacent categories; and acquisitions.

Greencore said it was monitoring the potential implications of Brexit, particularly in volume, material sourcing and labour availability, and explained it had been engaged in Brexit planning since the result of the referendum was announced.

The business added that it believed the risks from Brexit were manageable in the medium-term, but the challenges of a ‘no-deal Brexit’ remained uncertain.

“Despite the short-term uncertainties of Brexit, our scale, depth and expertise in attractive and structurally growing food categories mean that we are confident in the future growth prospects for Greencore,” said Coveney.

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