Continued momentum with strong delivery against financial targets
in first half; upgrade to full year guidance
Greencore Group plc (“Greencore” or the “Group”), a leading manufacturer of convenience foods in the UK, today issues its results for the half year ended 28 March 2025 (“H1 25”) and an upgrade to its full year guidance. The Group has also today separately announced it has agreed the terms of a recommended acquisition of Bakkavor Group plc.
SUMMARY FINANCIAL PERFORMANCE1
| H1 25 | H1 24 | Change | |
| £m | £m | ||
| Revenue | 922.0 | 866.1 | +6.5% |
| Pro Forma Revenue Growth | +6.5% | ||
| Gross Margin | 32.7% | 32.5% | +20bps |
| Adjusted EBITDA | 73.1 | 55.9 | +30.8% |
| Group Operating Profit | 38.1 | 25.3 | +50.6% |
| Adjusted Operating Profit | 45.2 | 28.3 | +59.7% |
| Adjusted Operating Margin | 4.9% | 3.3% | +160 bps |
| Profit Before Taxation | 26.7 | 14.7 | +81.6% |
| Adjusted Profit Before Tax | 34.8 | 16.9 | +105.9% |
| Basic EPS (pence) | 4.5 | 2.5 | +80.0% |
| Adjusted EPS (pence) | 6.1 | 2.8 | +117.9% |
| Group Exceptional Items (after tax) | (4.7) | (1.3) | -£3.4m |
| Free Cash Flow | 37.8 | (26.5) | +£64.3m |
| Free Cash Flow Conversion | 78.6% | 36.7% | |
| Net Debt (excluding lease liabilities) | (136.2) | (198.0) | +£61.8m |
| Adjusted Net Debt: Adjusted EBITDA as per financing agreements5 | 0.8x | 1.4x | +0.6x |
| Return on Invested Capital (“ROIC”) | 13.1% | 10.2% | +290 bps |
FINANCIAL HIGHLIGHTS
- Revenue growth of 6.5% to £922.0m, driven by net new business wins impact of 2.9%, underlying volume and mix impact of 1.0% and the positive impact of inflation recovery and price of 2.6%
- Strong growth in Adjusted Operating Profit of 59.7% to £45.2m, driven by disciplined cost management through operational and commercial excellence initiatives and continued growth with customers
- Free cash flow increased to £37.8m, alongside an increase in free cash flow conversion
- Strong balance sheet at period end with Adjusted Net Debt (excluding lease liabilities) to Adjusted EBITDA as per financing arrangements reducing to 0.8x (H1 24: 1.4x)5
- Return on Invested Capital (“ROIC”) increased significantly by 290bps, to 13.1%
- Upgrade to FY25 Adjusted Operating Profit guidance to a range of £114-117m2, bringing the Group to above pre-pandemic levels of profitability
STRATEGIC & OPERATIONAL HIGHLIGHTS
- Overall volume growth of 2.5%, inclusive of net new business wins, and underlying volume growth of 5%, ahead of the wider grocery market3
- Outstanding operational service levels of 1% achieved in H1 254
- Continued focus on product innovation, with 270 new products launched during H1 25
- New business won across food-to-go and in ambient grocery, which are expected to be onboarded in Q3 and Q4 FY25
- Continued delivery of operational excellence programme, including deployment of automation and proactive management of network utilisation
- “Making Business Easier” transformation programme continues to build momentum and make progress to update the Group’s IT infrastructure and improve process efficiency
- UK pension scheme is still expected to achieve a fully funded position by the end of September 2025, resulting in a reduction in annual funding contributions of £9.8m
With the consent of Bakkavor Group plc, the UK Panel on Takeovers and Mergers has confirmed that the foregoing statement in relation to FY25 Adjusted Operating Profit (the “Profit Forecast”) constitutes an ordinary course profit forecast for the purposes of Note 2(b) to Rule 28.1 of the City Code on Takeovers and Mergers (the “Takeover Code”), to which the requirements of Rule 28.1(c)(i) of the Takeover Code apply. The additional disclosures required by the Takeover Code are set out in the Appendix to this announcement.
Dalton Philips, Chief Executive Officer, said:
“The Greencore team again made excellent progress in the first half of the financial year, consistently delivering fresh, high quality convenience food to our customers and their shoppers. By continuing to strengthen our core business, we’ve accelerated our financial performance – enhancing returns, improving margins and driving growth ahead of the market. We have built strong momentum and remain committed to continued delivery.
Our strong first half performance was enabled by continued growth with customers, innovative new products and disciplined cost management, including through operational excellence and automation. The momentum and strength of our business is a credit to all of our Greencore colleagues whose continued dedication and focus has enabled us to deliver this performance.
While we are mindful of a challenging market environment, and with our seasonally stronger second half still ahead of us, we now expect Adjusted Operating Profit for FY25 to be ahead of previous guidance, in the range of £114-117m2.”
Presentation & Conference Call
A webcast and conference call for analysts and investors will take place at 7.45am on 15 May 2025. Registration and dial in details are available at www.greencore.com/investor-relations/. The materials will be available following the presentation.
Basis of preparation
Details of the basis of preparation of the financial information within this Interim Financial Report can be found in Note 1 to the attached financial information.
Forward‐looking statements
Certain statements made in this document are, or may be deemed to be, forward‐looking. These represent expectations for the Group’s business, and involve known and unknown risks and uncertainties, many of which are beyond the Group’s control. The Group has based these forward‐looking statements on current expectations and projections about future events based on information currently available to the Group. The forward-looking statements contained in this document include statements relating to the financial condition, results of operations, business, viability and future performance of the Group and certain of the Group’s plans and objectives. These forward-looking statements include all statements that do not relate only to historical or current facts and may generally, but not always, be identified by the use of words such as ‘will’, ‘aims’, achieves’, ‘anticipates’, ‘continue’, ‘could’, ‘develop’, ‘should’, ‘expects’, ‘is expected to’, ‘may’, maintain’, ‘grow’, ‘estimates’, ‘ensure’, ‘believes’, ‘intends’, ‘projects’, ‘sustain’, ‘targets’, or the negative thereof, or similar future or conditional expressions, but their absence does not mean that a statement is not forward-looking.
By their nature, forward-looking statements are prospective and involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future and reflect the Group’s current expectations and assumptions as to such future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements. There may be risks and uncertainties that the Group is unable to predict at this time or that the Group currently does not expect to have a material adverse effect on its business. You should not place undue reliance on any forward-looking statements. These forward-looking statements are made as of the date of this announcement. The Group expressly disclaims any obligation to publicly update or review these forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.
