Greencore has reported a group revenue increase of 4.2%, to £1498.5 million, for its 2018 fiscal year, which it called a 'year of significant change' for the group.
Profit before tax at the group rose to £17.8 million, a jump of 12.7% on the previous year.
Adjusted Operating Profit growth of 1.7% in continuing operations, weighted to the second half of the year.
“We delivered good underlying growth in the UK, with favourable consumer and retailer trends helping drive our core food to go business,” Patrick Coveney, CEO, said.
“After the financial year-end, we took the decision to sell our US business having received a compelling offer for it. We will now focus all of our attention and resources on the significant growth opportunities that we see in the UK, both organic and inorganic.”
Here's low leading industry analysts viewed the group's performance.
David Fahy, Cantor Fitzgerald
"A relatively positive set of results with figures generally coming in line and the change to the capital return policy making sense. Food to Go drove growth again, a trend which we expect to continue for the medium term. As we have highlighted previously, the sale of the US business removes a significant portion of the growth opportunity, however, given the price paid we understand managements rationale. It is now left with a smaller market with lower growth potential, higher concentration risk and possible pricing pressures.
"Growth above the category rate will have to stem from innovation in the product range and operational efficiencies. However, its current low valuation of c. 7x FY18 EV/EBITDA should be taken into consideration."
Cathal Kenny, Davy Stockbrokers
"Greencore’s FY18 results bring closure to its US journey. Investor focus returns solely to its UK franchise, which is underpinned by its Food-to-Go (FtG) platform – the sole driver of profit growth in FY18. Its qualitative outlook statement calls for continued underlying revenue and profit growth in FY19 – against a more tempered revenue environment, productivity initiatives will take on greater significance.
"We anticipate no material change to our FY19 UK/Ireland operating profit forecast (£115.5m on a pre-reallocation of central costs)."
Jason Molins, Goodbody Stockbrokers
"Overall a solid update from Greencore this morning with EPS of 15.1p coming towards the middle of the guided range. Following the decision to sell the US business, Greencore note that it sees “significant growth opportunities” in the UK, both organic and inorganic. Furthermore, following consultation with shareholders, Greencore will return up to £509m to shareholders via a tender offer rather than the previously announced special dividend.
"While management recognise risks around Brexit, it believes they can be managed and therefore has guided for revenue and profit growth in FY19."
© 2018 Checkout – your source for the latest Irish retail news. Article by Donna Ahern. Click subscribe to sign up for the Checkout print edition.
