Greencore Group (LON:GNC) shares took a knock after the ready meals company reported a decline in annual revenues as it continued disposals as part of a “fundamental reset” of the business.
The company, which prepares over 700mln sandwiches a year, said in an update on Tuesday that it had completed the sale of its US business for £55.9mln on Monday, which helped pre-tax profit triple to £56.4mln in the year to the end of September.
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Nevertheless, sales from continuing operations declined by 3.5% to £1.4bn in the year to the end of September, which the FTSE 250-listed group blamed on property disposals and exits in its longer-life ready meals divisions in Hull, Evercreech and Kiveton.
Chief operating officer Peter Haden will also step down as an executive director at the end of December, before leaving the group in April, as part of a bid to “simplify the management structure”.
Patrick Coveney, chief executive officer, said he expects next year to deliver profitable growth, with a target to achieve mid single-digit organic revenue growth in the medium term.
He added, “over the past twelve months we have fundamentally reset our business”, saying that the group’s plan was “expanding our category and channel capabilities within the diverse, growing and attractive UK food to go market”, such as the recent £56mln acquisition of UK salad maker Freshtime.
Coveney hailed the improvement of adjusted operating profit margins by 30 basis points despite the “backdrop of a subdued UK trading environment, especially in the second half of the year”.
House broker Shore Capital said Greencore was now “fully focused on the UK market, and with leading exposure within attractive ‘food to go’ categories”, seeing future growth being augmented by selective bolt-on deals and capital discipline.
Shares fell 6% to 233.4p in morning trading on Tuesday,