Soggy sandwich: Food firm Greencore sinks to first-half loss
Convenience food producer Greencore has sunk to a loss in the first half, but there is “cause for optimism” as people head back to the office.
The FTSE 250 firm reported a group loss before tax of £1.8m in the first half of the year down from a group profit of £27.3m a year earlier.
Group revenue slid 19 per cent to £577.1m in the six months to the end of March, driven by tiered restrictions and further lockdowns across the UK.
Shares plunged 8.2 per cent in early trading.
Greencore has been hit hard by the pandemic and incurred related costs of £24.6m according to its full-year results last autumn.
Last year the Irish company sought a £90m equity placing to mitigate the impact of the pandemic after the group’s pre-tax profits plummeted 81 per cent to £17.3m.
But there are encouraging signs for the UK’s biggest sandwich maker as the country starts to reopen. Greencore expects a continued reopening in line with the current roadmap would be expected to generate a full-year adjusted operating profit outturn above last year’s levels.
It also expects net debt excluding lease liabilities, which currently stands at £271.3m as at 26 March, to reduce further from current levels.
In the first seven weeks of the second half of the year, revenue in Greencore’s food-to-go categories is 123 per cent higher than the previous and around 14 per cent below the equivalent pre-pandemic levels in 2019.
“This has been a challenging period for Greencore, but the consistent build in our revenues since early March as lockdown measures have eased and COVID-19 cases have fallen give us real cause for optimism,” chief executive Patrick Coveney said. “Our focus now is on rebuilding revenue, profitability and cash flow momentum as the UK economy reopens.”