Greencore Deal With Peacock Boosts Q1 Profit

23 May 2017 --- Convenience food group Greencore has reported a 46% increase in revenue in the first quarter, hot on the heels of the acquisition of US convenience food manufacturing partner Peacock last December.

CEO Patrick Coveney describes a “transformational period” following the deal with Peacock Foods in the US, and says that despite considerable change across the Group, revenues and profit growth has been strong in Q1 - and looking ahead for the rest of 2017, he is confident the Group will continue to make progress throughout the year and beyond.

The Dublin-headquartered group saw revenue increase to £1,010.3 million in the 26 weeks to March 31, 2017, while earnings went up 31.2% to £79.1 million (US$102.7 million).

The company says that two new reporting segments created to reflect substantially changed company structure: Convenience Foods UK & Ireland with revenue of £685.7million (US$890 million), up 16.1% as reported and up 10.6% on a pro forma basis and Convenience Foods US with revenue of £324.6 million (US$421.3 million), up 220.8% as reported and up 2.5% on a pro forma basis.

Group operating profit was up 27.1% to £55.3 million (US$71.8 million), while pre-tax profit rose by 29% to £34.6 million (US$45 million).

The group’s Irish and UK business saw strong growth in the period, with revenues up by 16.1%, driven by the “continuing strength” of the Food to Go business.

“This has been a transformational period for Greencore following the acquisition and integration of Peacock Foods in the US. Against a backdrop of considerable change across the Group, we are pleased to be reporting strong revenue and profit growth for the first half of the year,” says CEO Patrick Coveney.

“In the UK, we have delivered significant expansion and investment following recent new long-term business wins, as our Food to Go business continues to grow rapidly. In the US, the addition of Peacock Foods has transformed our market and channel position and has given us a growth platform of real scale.”

“The enhanced capabilities, product offerings, and customer relationships that have been added to the Group in a short space of time, combined with the strength of our underlying business, mean that we are confident of making further progress in FY17 and beyond.”

The Group also cites other strategic developments that have contributed to growth including significant capacity additions and commercial launches with key customers in the UK, successfully mitigating the impact of inflation in raw materials, packaging and labour and completing the acquisition of Peacock Foods at the end last December, transforming the Group’s US business.

Greencore is Britain’s biggest sandwich maker and its purchase of Peacock marked its biggest acquisition to date. At the time of the deal Coveney was confident that shareholders would approve because it would add “significant scale to our operations.”