Greencore has predicted a rapid bounceback of the beleaguered food-to-go market after the slump in sales during lockdown sent it to a first-half loss.
The UK’s largest sandwich maker this week said sales fell by a further 19% to £577.1m in the six months to 26 March. That resulted in the company swinging to a pre-tax loss of £1.8m, compared with a profit of £27.3m in the same period last year.
Its key food-to-go categories were down 25.6% to £339.2m, with pro forma sales down 30% in the second quarter compared with a 22% reduction in Q1.
However, CEO Patrick Coveney forecast a strong rebound in the category in the coming months as the UK reopened from the latest lockdown.
In the first seven weeks of its second half, food-to-go sales were up 23% on 2020 and are now 14% below the pre-Covid period.
Coveney told The Grocer he expected Greencore’s food to go sales to be back at pre-Covid levels by the end of its financial year.
“Our expectation, particularly with the contribution of new business, is we should go into late autumn and winter substantially back where we were as an overall business pre-Covid,” he said.
However, he said that despite some bottom line improvement this year, revenue recovery will come before a significant rebound in profitability, due to the onboarding of new business, unwinding COVID operating restrictions and restarting productivity programmes.
Greencore shares fell 15.7% to a three-month low of 144p on Tuesday as its first half figures were below market expectations.