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In a trading update covering the 13 weeks to 29 December 2017, Greencore saw revenue increase 523.7% to £640.5m On a like for like basis, excluding the acquisition of Peacock Foods revenue grew 7.2% in the quarter. Greencore purchased Peacock Foods at the end of December 2016.
Its UK and Irish convenience foods business grew 9.2% to £385.4m. The growth was driven by the Food to Go business, where reported revenue grew by 12.2%.
On Monday, Greencore announced it had reached an agreement to sell its cakes and desserts business in Hull. This sale, along with the previously announced closure of its desserts facility in Evercreech, marks Greencore’s exit from the UK cakes and desserts sector.
The group says this disposal is neutral on adjusted earnings, although it will take a one-off charge of around £15m to the income statement in its FY18 interim results.
Tax boost
Greencore's US convenience foods business reported revenue growth of 297% to £255.1m, reflecting the acquisition of Peacock Foods. Excluding this, revenue growth was 5.1%, driven by volume growth of around 7%.
Greencore expects a $28m injection from the reduction in the US corporate income tax rate. It is also expected that Greencore will benefit from the lower rate of corporate income tax on future taxable earnings in its US business.
The Group has not changed its outlook for the year and anticipates delivering a year of strong growth in FY18.
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