Greencore FY revenue up 11%, announces proposed acquisition of Peacock Foods

Greencore reported a jump in full-year revenue and earnings as it hiked its dividend and announced the proposed acquisition of Peacock Foods for an enterprise value of $747.5m.

In its preliminary results for the year to the end of September, the company said revenue was up 10.6% to £1.48bn, or 5.9% higher on a like-for-like basis, while group earnings before interest, taxes, depreciation and amortisation were up 13.9% to £138.4m.

Convenience Foods revenue grew 6.6% on a LFL basis to £1.44bn and Greencore proposed a final dividend of 4.10p per share, giving a total dividend of 6.65p per share, up 8.1%.

Greencore said it saw continued strong momentum across UK and US food-to-go activity, with 10.5% like-for-like revenue growth, well ahead of market performance.

Also on Monday, the group announced the proposed acquisition of Peacock Foods, a US convenience food manufacturer which generated revenue of around $1bn and adjusted EBITDA of $72.1m in the year to September.

Greencore said the deal has the potential to transform its market and channel position in the US and create a strong platform for long-term profitable growth.

The acquisition will be funded by a fully underwritten rights issue offered to qualifying shareholders to raise a total of £439.4m and new debt facilities of approximately £200m.

Chief executive officer Patrick Coveney said: “This has been another year of strong performance for Greencore, and these results should be seen as a clear indication that our strategy of focusing on the UK and US Convenience Foods markets is continuing to work well.

In the UK, we have delivered substantial like-for-like growth against the backdrop of a challenging retail market and an uncertain economic environment, and in the US we now have a business that is primed to deliver sustainable, profitable growth. Given the underlying commercial momentum across the group, our strong market positions, the transformational acquisition of Peacock Foods in the US that we have announced separately today, and our recent new business wins, we are confident about Greencore's future prospects."