Greencore Group PLC (LSE:GNC) reported increased profit and revenue for the year to 24 September 2021 on the back of easing COVID-19 restrictions and a return to growth in the ‘food to go’ sector.
The convenience food group said it expects its results for the current year to be in line with market expectations, with profitability weighted towards the second half, reflecting seasonality.
It cautioned that its guidance assumes no resumption of pandemic-related lockdowns if infection rates rise in the UK.
It also noted that its performance continues to be impacted by the supply chain and labour challenges that are affecting the industry.
Revenue rose by 4.8% to £1.32bn in the year to 24 September 2021, with adjusted operating profit surging 20% to £39mln, the group said in its earnings release.
At the pre-tax level, the company swung back into a profit of £27.8mln from a loss of £10.8mln in the previous year.
Greencore described trading so far in the current year as “encouraging” and said the positive revenue momentum has continued across the business, with strong demand in ‘food to go’ and other convenience categories.
The company reported strong free cash flow of £72.2mln, driven by improved profitability and working capital inflows as volumes rebounded.
Net debt stood at £183.1mln at the year-end, while cash and undrawn committed bank facilities amounted to £433.6mln.
Greencore did not pay a dividend, but said it is committed to recommencing value return to shareholders in FY22.
Commenting on the results, chief executive Patrick Coveney said:
"Greencore has weathered the storm and emerged strongly from a difficult period. Following a challenging first half in FY21, we made good progress in rebuilding revenues, cashflows and profitability in H2 and are confident of maintaining this positive trajectory in the year ahead, particularly in the seasonally important second half.
“The strong recovery of the UK food to go market, as well as solid performance in other convenience food categories, underpins this confidence. New business wins achieved last year are contributing to our momentum, and we anticipate delivery of profits for the year ahead in line with current market expectations.”