Major supermarket convenience food manufacturer Greencore Group PLC (LON:GNC) said demand is holding up in response to coronavirus and its supply chain and production facilities have so far remained “fully operational”.
The FTSE 250 group, which makes everything from microwave meals, sandwiches, wraps, salads, sushi and soups, said it has “implemented an extensive range of measures to keep colleagues safe”.
Ireland-based Greencore said there had been a material impact of coronavirus on the food industry and on Greencore over the past 10 days, with a “pronounced change” in the mix of food orders from supermarkets across and across customers' store formats.
This means demand is shifting towards products with longer shelflife such as ready meals, cooking sauces and soups, with some reductions in demand for shorter-life things like sandwiches and sushi as footfall drops off sharply at smaller stores in stations, airports and city centres.
Food safety
Chief executive Patrick Coveney said the group had three priorities amid the pandemic: “keeping our colleagues safe, feeding the UK and protecting our business”.
While trading in the five months since its September year-end were in line with expectations, the Ireland-based group confirmed that the impact of coronavirus has become “pronounced” on the food industry and on Greencore over the past 10 days.
“The health and safety of our colleagues, customers and business partners is paramount,” Coveney said.
“We are closely monitoring all aspects of our business and are confident that we have the team, customer partnerships and protocols in place to maintain food supply through this uncertain period.”
He said the group has “substantial financial headroom”, with cash and equivalents of £41.6mln, undrawn bank facilities of £175mln as of 27 September and no debt maturities in any facilities in the next 18 months out of its committed debt of £506mln.
However, given the level of uncertainty, the group said it is too early to predict the impact of Covid-19 on full-year results to end-September.
Shares in Greencore, having hit a three-year high in December but lost around two-third of their value since then, were up 6% to 106.2p by late morning on Wednesday.