Greencore Group PLC (LON:GNC) reported a rise in full-year revenues amid the offloading of its US business and a re-focus on the UK, however, it also cautioned on the outlook amid Brexit uncertainty.
The FTSE 250-food group, which owns the Bisto brand, said its continuing operations adjusted underlying earnings (EBITDA) came in at £140mln for the year, up 1.7% on 2017, while revenues rose 4.2% to around £1.5bn.
READ: Greencore dives as it agrees US$1bn sale of US business
For its US division, which the company agreed to sell in October, adjusted operating profits were up 29% at £48mln while revenues climbed 20.5% to £1.06bn.
The group sold its US arm in a US$1bn deal with snacks giant Hearthside Food in a bid to double down on its “dynamic” home market in the UK & Ireland.
The move seemed to mark a change in strategy for Greencore’s chief executive, Patrick Coveney, who had previously seemed keen on breaking into the US market.
The bulk of the cash from the sale, around £509mln, will be returned to shareholders via a tender offer. The remaining proceeds not taken up, will be distributed to shareholders via a special dividend, the statement added.
Greencore retained its final dividend for the year at 3.37p per share, taking the total dividend for the year to 5.57p compared to 5.47p last year.
Brexit uncertainty persists in near-term
In its outlook, Greencore said it expected “continued underlying revenue growth” in its key convenience food categories, which would drive adjusted operating profit growth.
However, the group said that while the risks from Brexit next year were “manageable” in the medium-term, “the near-term challenges associated with a 'no withdrawal agreement' are uncertain”.
Patrick Coveney, chief executive of Greencore, said that following the sale of the SU business, the firm would now “focus all of our attention and resources on the significant growth opportunities that we see in the UK, both organic and inorganic”.
“Despite the short-term uncertainties of Brexit, our scale, depth and expertise in attractive and structurally growing food categories mean that we are confident in the future growth prospects for Greencore."
In late-morning trading Tuesday, Greencore shares were down 3% at 178.1p.
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