1st Oct 2021 08:31
(Alliance News) - Greencore Group PLC on Friday reported a further improvement in revenue, profitability and cash flow momentum during the fourth quarter of its financial year, but warned of supply chain and labour challenges persisting across the UK food industry.
The Dublin-based convenience foods manufacturer said its top line trends continued to recover for the fourth quarter which ended September 24, with revenue 27% above fourth quarter 2020 levels and 1% above equivalent pre-Covid levels in 2019. The improvement was partly attributed to a continued increase in demand for food-to-go categories and new business wins.
For the full year, Greencore expects to report revenue of GBP1.32 billion. It posted revenue of GBP1.26 billion in financial 2020.
In addition, Greencore expects to generate adjusted operating profit towards the upper end of previous guidance of between GBP36 million and GBP40 million for financial 2021.
Despite the positive trading result, the company cautioned that supply chain and recruitment challenges were ongoing and that it was working to mitigate the impact and "engaging intensively with customers to recover input cost and other inflation".
Net debt at year-end is expected to be below GBP190 million, an improvement on previous guidance of below GBP240 million. The outlook uplift was boosted by strong cash generation in the final quarter, the company noted.
"We are pleased with the further improvement in our business in the fourth quarter, in particular the increase in demand across the business and our strong underlying cash generation," said Chief Executive Officer Patrick Coveney. "Greencore has a strong position in the dynamic UK convenience food market and, looking forward, we remain confident in our medium-term prospects."
Looking ahead, Greencore said it was "encouraged by the progress" seen in the final quarter of the year.
Shares were down 4.5% to 134.80 pence each in London early on Friday morning.
By Will Paige; [email protected]
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