Greencore posts operating loss but revenue and profit up

In the 26 weeks to 30 March, the company made an operating loss of £4.4m compared to a profit of £24.5m in the same period a year ago. Still, group revenue was up 22.6% to £1.2bn, benefiting from the Peacock Foods acquisition, and adjusted pre-tax profit rose 5.6% to £47.2m.

The company said it saw strong underlying revenue growth in both the UK and the US, while profit growth was hit by challenges in the original part of the US business. Exceptional items before tax rose to £53.1m from £10.7m the year before, related to the restructuring initiatives in the UK and the US and to the write-down of the group's Rhode Island facility which has ceased production.

In its last update, Greencore had highlighted continued low capacity utilisation at some of its original US sites and said it was restructuring its US network to reflect the commercial pipeline and to address these utilisation challenges.

Chief executive officer Patrick Coveney said: "The first half of FY18 has been challenging for Greencore and its shareholders. While we delivered strong revenue growth in both the UK and US, profit growth was impacted by the challenges experienced in the original part of Greencore's US division.

"As a result of the significant strategic, network and organisational measures that we have taken in order to address these challenges, we believe that our US business is now much better positioned to deliver an improved performance in the second half of the year and beyond. We anticipate strong organic growth for the remainder of FY18."

Shore Capital said the results were solid, "set within the context of a material cut in profits post a wide ranging 13th March statement".

At 0910 BST, the shares were up 11% to 173.45p.