City snapshot: Greencore upgrades profit forecasts after ‘outstanding performance’ in Q4

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Profits at Greencore will be ahead of expectations thanks to “an outstanding performance” in the final quarter of its financial year.

The food-to-go supplier this morning reported year-on-year like-for-like revenue growth of 3.7% in Q4, pushing the full-year figure to 3.4%.

The group added in the trading update that revenues for the year were expected to be about £1.8.bn.

Profit conversion during the fourth quarter was ahead of expectations and Greencore now expects adjusted operating profits to be ahead of market forecasts.

CEO Dalton Philips said: “The Greencore team delivered an outstanding performance with our FY24 results now expected to exceed current market expectations. Providing high-quality, fresh and healthy food to our customers every day is at the heart of what we do. To all our colleagues who work tirelessly to make this happen I would like to say a huge thank you.

“As we enter the new financial year, our focus remains on making really great food, rebuilding our profitability, and positioning Greencore to be the UK’s leading convenience foods manufacturer. We’ll share more detail at our FY24 results in early December, and will use our Capital Markets Day in early 2025 to outline our medium-term growth strategy.”

Morning update

Grocery price inflation increased slightly to 2% during the four weeks to 29 September, up from 1.7% last month, according to the latest data from Kantar.

Take-home sales at the grocers grew by 2% over the same period.

Kantar found that spending on promoted items continued to rise, climbing by 7.4% in September as households sought to manage their finances.

“In the fiercely competitive retail sector, the battle for value is on,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

“Supermarkets are doing what they can to keep costs down for consumers and thanks to their efforts the prices in some categories are falling.”

Ocado was the fastest growing grocer for the eighth month running, while Tesco achieved its largest share since December 2017 with 28% of the market.

Asda maintained its share at 12.6%, which is down from 13.7% a year ago.

English wine producer Gusbourne has secured additional funding to bolster working capital and to fuel future growth.

The business completed an extension of its existing long-term secured deep discount bond through the issue of an additional £1m bond.

It follows the group agreeing a £20m bond with a company associated with Lord Ashcroft - who is the major shareholder in Gusbourne - earlier this year.

Chairman Jim Ormonde said: “The board are pleased to announce this additional funding and are very appreciative of the continued support of the major shareholder to underpin the company’s growth strategy.”

Imperial Brands has confirmed its trading is in line with expectations as it logged further growth in tobacco and next generation products.

The group flagged “strong growth” in NGP net revenues alongside a further reduction in operating losses for the division.

Group adjusted operating profit growth was in line with guidance, the update said.

“We are pleased to report another year of operational and financial delivery against our five-year strategy to transform the business,” Imperial added.

Food sales increased 3.1% year on year over the three months to September, against a growth of 7.4% in September 2023, according to the latest BRC-KPMG retail sales monitor.

UK total retail sales increased by 2% year on year, against a growth of 2.7% in September 2023.

IGD CEO Sarah Bradbury said: “Shopper confidence remained stable in September after a summer buoyed by sport.

“As shoppers turn their focus to the upcoming winter months, news of a difficult Autumn Budget and rising energy prices will likely cause a downturn in confidence with cost-of-living concerns remaining front and centre in shoppers’ minds.”

Spending on groceries fell (-0.8%) for the first time since June (-2.2%), as Brits continue to find ways to cut costs, with supermarkets experiencing a -1.1% dip, according to the Barclays Consumer Spend report for September.

A 1.2% increase in consumer card spending was lifted by music fans racing to secure tickets for Oasis concerys.

Karen Johnson, head of retail at Barclays, said: “While many are anticipating a costly Christmas, there are encouraging signs that people feel confident in their ability to manage their household finances and take control of their festive spending.”

International cafe chain Cooks Coffee has reported a 26% increase in store sales to £16.4m in the 26 weeks to 29 September for its Organic Coffee Company branded franchised business in the UK & Ireland.

UK store sales rose 36% to £11.4m, while Ireland store sales increased 6.7% to £5.1m.

The group had 83 sites in the two countries at the end of the half, up from 75 in April.

CEO Aiden Keegan said he was “delighted” by the continued growth and the strong performance of newly opened stores.

“FY25 so far has been a record-breaking period for company, and this achievement is a testament to the hard work and commitment of our entire team,” he added.