Convenience foods drive Greencore growth

Hunger for convenience foods drove growth at Greencore Group in the first quarter, with the company issuing a trading update on Tuesday morning.

The FTSE 250 group recorded revenues of £356m during the 13 weeks to 25 December 2015; an increase of 7.2% on the prior year (6.8% on a constant currency basis).

Its convenience foods division recorded a 7.7% revenue increase, to £345.1m, with the UK division growing by 7.9%.
Greencore said that while the UK grocery market remained challenging, its core chilled categories were performing well.

The company also neared completion of a new production facility at Northampton, with commissioning due in the spring.

Its US convenience foods division reported revenue growth of 6.5%, which was in line with expectations following the closure of its Brockton facility on November and the related product and customer exits.

Greencore said progress was being made on ramping up production capability at its Quonset, Rhode Island facility, as well as constructing new facilities in Seattle.

The firm said its non-convenience foods division - ingredients and property - now represented less than 5% of group activity, with recorded revenues of £10.9m being 6% lower than the previous corresponding period.

"The business has had a good start to the year and our major investments in capacity and capability enhancement are proceeding to plan", Greencore's board said in a statement.

"We remain comfident in our ability to deliver performance in line with market expectations", it added.