27th Jan 2022 14:04
(Alliance News) - Greencore Group PLC on Thursday said revenue was up by a quarter for the first three months of its financial year, but supply chain and labour challenges continued to hit profit conversion.
The Irish convenience food company said total revenue was up 25% year-on-year in the quarter ending December 24, and up pro forma on 2019 by 7.5%. This was driven primarily by 35% growth in food-to-go categories, as consumer appetites recovered, but momentum was hampered by the effects of the Omicron variant.
The company said it continued to recover input costs and other inflation with customers.
Greencore, the largest sandwich manufacturer in the UK, said performance for the full year will be difficult to predict. The company pointed to ongoing uncertainty around Covid, inflation being due to rise, and supply chain and labour challenges which have hurt the pace of profit conversion.
However, Greencore predicts it will finish the financial year in line with market expectations, with profit weighted towards the second half, provided no more Covid restrictions are put in place. It expects to see revenue from its new business wins in the second half, following a GBP30 million investment in three manufacturing sites.
The company's share price was up 0.7% to 125.90 pence each in London on Thursday afternoon.
Looking ahead, Greencore said: "The uncertainty regarding the duration and impact of Covid-19 variants on the group's trading environment, particularly on demand in its food to go categories, has made it more difficult to predict 2022 performance. To date, there has been some impact on the group's revenue momentum in what is its seasonally quieter period of the year.
"Though these challenges persist, the group continues to anticipate a 2022 outturn in line with market expectations. This assumes no material resumption of mobility restrictions or lockdowns arising from increasing Covid-19 infection rates in the UK. Profitability will be heavily weighted towards the seasonally important second half of the year."
Interim results will be released on May 24.
By Elizabeth Winter; [email protected]
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