A glance at the share price chart shows growing investor appetite for convenience food manufacturer Greencore (GNC), one of our top picks for 2016. We’re already 8.8% in the money since we said to buy at 337.6p.

As we outlined in December 2015, Greencore offers a compelling play on the structurally-growing food-to-go segment in the UK and across the pond, where the chilled prepared meals, salads and sandwiches maker is investing heavily in capacity expansion.

Pleasingly, the food producer's first quarter trading update (26 Jan) highlighted continued sales growth momentum in the 13 weeks to 25 December 2015, driven by food-to-go.

2016 Pick Update - Greencore

Sales were 7.2% ahead year-on-year at £356 million, buoyed by 7.9% and 6.5% growth in the UK and US convenience foods businesses respectively. Despite tough conditions, Greencore is winning market share in the UK and continues to invest in the US, where a move into profitability is anticipated in the current financial year.

Reassured by the update, Shore Capital is sticking with its upper-end of the range forecasts for the financial year to September 2016, pointing to £88.8 million of pre-tax profit (2015: £77.3 million), earnings of 19.9p (2015: 17.6p) and a dividend hike to 7p (2015: 6.2p).

With Greencore outperforming a challenging UK market and making strides across the pond, we remain bullish at 367.2p.



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Issue Date: 09 Feb 2016