Over the past five years, dual-listed, Irish-domiciled convenience food producer Greencore (GNC) has established an enviable growth record by targeting one of the most exciting parts of the UK food market: food-to-go. Indeed, between its 2012 and 2016 financial years it has achieved a compound annual earnings growth rate of 11.1 per cent. The company now looks set to step things up a gear having bagged a major acquisition in the US, Peacock Foods. This will help Greencore target similar consumer trends across the pond as well as benefiting from a move by the American food industry towards outsourcing. We think Greencore's proven ability to exploit long-term growth opportunities in the UK, coupled with its big overseas move, makes it an excellent growth prospect for 2017.
- Transformative acquisition
- Long-term growth in food-to-go market
- Rising dividend
- Strong customer relationships
- Execution risk
- Consumer spending Brexit risk
The food-to-go market in the UK is estimated by IDG Retail Analysis to have grown 6.8 per cent to £16.1bn in 2016. By 2021 it's expected to be 35 per cent larger at £21bn. Last year Greencore generated 45 per cent of total sales from the food-to-go market through its ranges of sandwiches, sushi and salads. Most of the rest of Greencore's business is split evenly between prepared meals, such as quiches and ready meals, and groceries, such as table sauces and chilled desserts.