The fast-growing food-to-go markets in the UK and US propelled profits at Greencore (GNC) in the first six months of the year. Like-for-like (LFL) sales in this sub-category grew 9 per cent, which boosted profits in the wider convenience foods division - which accounted for over 96 per cent of group sales - by 10 per cent to £39.3m.
The group's performance in the US, where LFL sales rose 15 per cent, was all the more impressive given that Greencore exited a number of product lines. This was estimated to have cut LFL sales by eight percentage points. Greencore also suffered some supply chain disruption at a newly built sandwich factory - now resolved. That left group-wide operating profit 8 per cent higher, at £40.1m. This excludes a £12.5m exceptional charge relating to restructuring and impairment costs last year.
Greencore, which makes convenience foods for retailers and supermarkets, has significantly stepped up its capital spending to build capacity in response to demand from new customers. Management is now planning to build a further factory in Washington state, in the US, to supply a key customer there. That's in addition to newly commissioned sites in Jacksonville and Rhode Island.
The consensus estimate for adjusted EPS for the full year is 18p, up from 16p last year.
| GREENCORE (GNC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 354p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 354-355p | 12-MONTH HIGH: | 357p | LOW: 229p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 65p* | NET DEBT: | 108% | |
| Half-year to 27 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 620 | 8.0 | 2.9 | 2.2 |
| 2015 | 640 | 26.3 | 6.3 | 2.4 |
| % change | +3 | +229 | +117 | +9 |
Ex-div: 4 Jun Payment: 2 Oct *Includes intangible assets of £506m, or 124p a share | ||||
