Greencore says its annual earnings are set to be better than expected this year as it vies to take over rival fresh food supplier Bakkavor.
The convenience food manufacturer gave no exact figures but said it saw “strong revenue and volume momentum” in its second quarter to 28 March.
Alongside further cost cutting, it said this delivered profits ahead of management’s expectations.
The group now expects operating profit to be ahead of market expectations, in the range of £112m to £115m for the year to September 2025. Previous forecasts came in at between £102.6m and £107m.
Greencore’s share price was up 5% following the announcement.
“Greencore is on a roll,” said Russ Mould, investment director at AJ Bell. “Its bread and butter of supplying convenience foods is going exceedingly well and profit is now set to beat previous expectations.”
“The end of the pandemic was the big turning point for Greencore. The more workers have been called back to the office, the bigger the demand for food on the go and Greencore has stepped up to the challenge.”
The latest profit guidance makes no account for the impact of its attempted acquisition of Bakkavor. Last week, Greencore reportedly upped its bid after a £1.1bn approach was rejected earlier in the month.
Bakkavor is currently weighing up the latest proposal, which would create a company with combined sales of £4bn.
Under City takeover rules, Greencore has until 5pm on 11 April to make a firm offer or walk away.
Last year, the group’s operating profit rose 28% to £84.3m with like-for-like revenue up 3.4%, though its total sales fell by £8m due to a decision to “resign a number of low-margin contracts”.
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