Convenience food manufacturer Greencore's (GNC) tasty run continues, the shares up another 7.6p to 356.2p on strong half-time figures and a confident outlook statement. In particular, CEO Patrick Coveney highlights nourishing progress in the food-to-go part of the business, the growth engine going forwards.
Click here to digest today's interims from the Dublin-headquartered food-to-go and private label food manufacturer for retailers including Marks & Spencer (MKS), Tesco (TSCO) and Morrisons (MRW). Key takeaways include robust top-line and pre-tax profit growth, operating margin expansion and a 9.1% hike in the shareholder reward to 2.4p.
Progress across these metrics highlights the resilience of cash-generative Greencore. Against a backdrop of structural disruption and price deflation underway in the UK grocery market, a focus on convenience food categories exhibiting volume growth continues to serve Greencore well.
Coveney, pictured below, stresses Greencore's strategy of 'deepening our leadership, capability, capacity footprint and customer partnerships in the UK and US food-to-go markets continues to deliver growth'. Like-for-like sales grew 8.7% in the food-to-go business, comprising sandwiches, sushi and salads, and Greencore enters the second half with momentum at its heels.
Manufacturing everything from cakes and Yorkshire Puddings to chilled ready meals, sauces and pickles, Greencore is upping its investment in high-growth food-to-go. The market is being driven by the roll-out of convenience stores by major grocers in the UK, as well as growth across the pond with customers including coffee shops colossus Starbucks (SBUX:NDQ) and 7-Eleven. The food-to-go arena is also benefiting from the most favourable consumer trends, with time-pressed shoppers seeking quick nourishment.
Besides extending its sandwich production capacity in Northampton, Greencore is scaling up production at its Jacksonville-based site in the US, where it has also completed the construction of a new sandwich plant in Rhode Island. Planning is also underway to build a new factory in Washington State by next Spring.