Sandwich maker Greencore has reaffirmed its full-year guidance following a “strong” first quarter with volumes growing ahead of the market.
Revenues in the 13 weeks to 27 December increased by 7.5% to £474.3m thanks to a 2.6% jump in volumes, new business wins and a 3.5% bump in prices to recover input cost inflation.
On a like-for-like basis, sales were up 4.9%.
Greencore said the first-quarter performance was delivered despite its supermarket customers remaining under “significant cost pressure from government-driven policy changes and a changing competitive landscape”.
Food-to-go categories increased 7.2% to £314.7m for the group as sandwich volumes rose 2.5% year on year, and sushi continued to show positive momentum with a 15.3% jump in volumes thanks to a new range being launched by one of Greencore’s customers.
Revenues in the convenience categories also increased 8.1% to £159.6m, with chilled ready meals volumes up 23.5% thanks to winning new contracts.
Greencore added that profit conversion in the quarter continued to be “strong” and in line with expectations.
CEO Dalton Philips said: “The group has made a positive start to FY25, and I am encouraged by the platform this provides us for the rest of the financial year.
“Our volume growth of 2.6% in the quarter again outperforms the market and is driven by both underlying volume growth and winning new business. This reflects a combination of the quality of our products, our commitment to innovation and the strength of our relationships with our customers.”
Greencore acknowledged the “unprecedented” labour cost challenges presented by the increase to the national living wage and National Insurance set out in the budget, but planned to offset it in full through “manufacturing automation, operational excellence, labour planning and technology investment, alongside our usual inflation recovery measures”.
The group is also in conversation with its customers to help mitigate costs.
“We have delivered a strong Q1 and are confident we will deliver a full-year performance in line with current market expectations,” Philips added.
Shares shot up 5.4% to 193p on the back of the trading update this morning.
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