19th May 2020 09:05
(Alliance News) - Greencore Group PLC on Tuesday said its profit surged in the first half of its current financial year but demand dropped dramatically over the past six weeks.
The manufacturer of convenience food in the UK reported pretax profit of GBP27.3 million for the 26 weeks ending March 27 compared to just GBP5.7 million reported for the same period a year ago. Revenue, meanwhile, grew by 1.6% to GBP712.7 million from GBP701.4 million year-on-year.
Despite that, Greencore said it will not be paying an interim dividend, having distributed 2.45 pence a share a year ago.
The company explained that since the start of the second half of its current financial year the Covid-19 pandemic has had a "dramatic and volatile" impact on the shape of UK food consumption.
Weekly demand in Greencore's food-to-go categories declined by as much as 70% but more recently is less than 60% below prior year levels.
More positively, the company said there has been sustained growth in its other convenience categories, in particular cooking sauces, with growth currently about 5% above prior year levels.
However, Greencore's revenue is now 60% of prior year levels on a proforma basis, it said.
"We have implemented a broad range of actions to mitigate the impact of Covid-19 on our business and to position us for growth as the pandemic eases," said Chief Executive Patrick Coveney.
"More than ever before, our deep customer relationships, leadership positions in key food categories, well invested network, flexible model, and outstanding people are key strengths that ensure we trade our way resiliently through this uncertain period," added Coveney.
FTSE 250-listed Greencore shares were trading 4.5% lower in London on Tuesday morning at 144.37p each.
By Evelina Grecenko; [email protected]
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