Greencore (GNC) has unveiled stellar first-half results, suggesting its strategy of focusing on the food-to-go market is really paying off. The maker of prepared meals and convenience treats, ranging from sushi to soups, reported that its US and UK food-to-go businesses together delivered a stunning 19 per cent rise in like-for-like sales during the period.
Finance director Alan Williams said the UK benefited from rising employment, a mild winter, convenience store roll-outs and demand for premium sandwiches, while the US operation was boosted by the first full year of business with Starbucks coffee. Success in the food-to-go category, coupled with a solid performance from the prepared food and grocery businesses, lifted underlying group revenue by 9 per cent. Adjusted pre-tax profit soared 21 per cent to £30.7m.
Alongside these numbers, Greencore announced a massive step-up in capital spending. The facility in Jacksonville, Florida, will receive £6m to allow frozen food production, a £20m sandwich factory will be built on Rhode Island, and the Northampton facility is to get a £30m face-lift to service a new business win. Meanwhile, Greencore acquired US frozen food supplier Lettieri's, and disposed of Ministry of Cake for £8m.
Investec expects pre-tax profit of £66.3m for the full year, giving EPS of 14.9p, up from £59m and 13.6p.
| GREENCORE (GNC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 267p | MARKET VALUE: | £1.08bn | |
| TOUCH: | 266-267p | 12-MONTH HIGH: | 304p | LOW: 117p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 64p* | NET DEBT: | 98% | |
| Half-year to 28 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 573 | 12.2 | 5.1 | 1.9 |
| 2014 | 620 | 8.0 | 2.9 | 2.2 |
| % change | +8 | -34 | -43 | +16 |
Ex-div: 4 Jun Payment: 3 Oct *Includes intangible assets of £503m, or 124p a share | ||||
