Greencore Group PLC (LSE:GNC) shares fell 7% to 222.35p after the ready meals giant said it was on track to meet full-year profit expectations after seeing 15.3% profits growth in its first set of results since acquiring Bakkavor.
The convenience food manufacturer said pro forma adjusted operating profit rose to £73.3 million in the six months to 27 March, while pro forma revenue increased 3.2% to £1.32 billion.
The group completed its £1.2 billion acquisition of Bakkavor in January, creating what it described as the UK’s largest fresh convenience food manufacturer.
Chief executive Dalton Philips said the integration was “progressing well and to plan”, with the company remaining on course to deliver at least £80 million of annual cost synergies within three years.
Reported revenue rose 43% to £1.32 billion following the inclusion of Bakkavor, while adjusted earnings per share increased 31.1% to 8p.
Greencore said trading in the third quarter had remained "robust" despite tougher comparisons following a strong comparative period last year.
The company added that it continued to monitor inflationary pressures linked to events in the Middle East but said it was “confident in the near-term mitigations” in place.
Net debt increased to £817.6 million following the acquisition, though leverage of 2.3 times earnings came in below expectations.
Greencore also confirmed its US business had been classified as a held-for-sale asset as it explores a potential disposal.
Broker Peel Hunt said it was a "solid" first half.