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Greencore has boosted revenues and profits as it recovered cost inflation and also improved volumes.

Revenues in the year ended 29 September increased 10% to £1.9bn and pre-tax profits rose 13.6% to £45.2m.

CEO Dalton Philips said the food-to-go specialist had delivered above-market volume growth, despite exiting a number of low margin contracts.

“In a challenging market environment, we have stabilised the business, and made good strategic progress,” he added.

Volumes at the group nudged up 0.7% during the year, while revenue growth was mainly driven by an 11.3% boost from the recovery of cost inflation.

Greencore experienced a low double-digit percentage rateof inflation in the period, which was largely recovered or mitigated through cost increases, cost reductions, product and range reformulations and alternative sourcing.

Sales in the food-to-go categories, including sandwiches, salads, sushi and chilled snacking, totalled £1.3bn and made up 65% of group revenues. Price increased and other inflation recovery acounted for most of the 7.9% growth in the division, with additional volume growth in sandwiches.

Greencore’s other convenience categories, including chilled ready meals, soups, sauces and quiche, increased sales by 14.3% to £661.1m.

“We are encouraged by our FY23 performance and the progress across the business,” Philips said. “That performance is testament to the strength of our relationships with our customers and suppliers and, in particular, to the hard work and dedication of the entire Greencore team.”

He added the group was confident in meeting market expectations for the new financial year.

Morning update

BRC-NielsenIQ shop price index for November

Food prices have continued to rise at a slower pace in November but the British Retail Consortium warned a new raft of higher costs hitting business could derail falling inflation in 2024.

Helen Dickinson, the CEO of the trade body, said increases in business rates and higher labour costs could stall progress in bringing down inflation.

“Retailers are committed to delivering an affordable Christmas for their customers,” she added.

“They face new headwinds in 2024 - from government-imposed increases in business rates bills, to the hidden costs of complying with new regulations. Combining these with the biggest rise to the National Living Wage on record will likely stall or even reverse progress made thus far on bringing down inflation, particularly in food.”

Food inflation decelerated to 7.8% in November, down from 8.8% in October, according to the latest BRC-NielsenIQ shop price index.

Fresh food inflation slowed further to 6.7%, down from 8.3% in October, to the lowest level since June 2022.

Ambient food inflation decelerated to 9.2% in November, down from 9.5% in the prior month and the lowest since October 2022.

Non-food inflation fell to 2.5% in November, down from 3.4% in October, and overall shop price inflation eased from 5.2% to 4.3%.

“Shop price inflation eased for the sixth month in a row as retailers competed fiercely to bring prices down for customers ahead of Christmas,” Dickinson said.

“Food inflation eased, thanks to lower domestic energy prices reducing overall input costs, particularly for dairy products. Ambient food inflation slowed but remained higher than fresh food due to a larger proportion of goods being imported to the UK and impacted by the weak pound. While health and beauty products saw price cuts as retailers rush to shift stock before Christmas, clothing prices increased as some retailers continued to hold off on promotional activity.”

Annual Treatt results

Drinks ingredients supplier Treatt has increased group revenues despite a double-digit top-line decline in the UK.

Sales in the UK fell 18% to £8m in the year to 30 September as the group was hit by destocking in the sector, while business in Europe also declined.

However, revenues in the US - the group’s largest market - grew 14% to £61.4m thanks to strong growth in citrus, and mainly driven by price increases.

Despite ongoing Covid restrictions, Treatt also increased revenues 21% to £9.5m in China.

Overall, group revenues increased 5.1% to £147.4m.

Pre-tax profits before exceptional items also grew 13.7% to £17.3m, but a number of one-off costs associated with redundancies following the closure and sale of a UK manufacturing site saw overall profits fall 16.3% to £13.5m.

CEO Daemmon Reeve, who is retiring after 32 years with the business, said Treatt had delivered “good progress” despite a challenging backdrop.

“As we enter the new financial year, while we are seeing some signs of recovery in a few customers, we are hoping to see further signs that destocking trends are reversing,” he added.

“In addition, long-term trends towards health and wellness, sugar reduction and use of natural extracts, areas in which Treatt excels, continue to support our core beverage market, and our largest geographical markets are returning to growth.

“These factors, together with the commitment and hard-work of all our colleagues in the past year and into the new, means that Treatt is well-positioned for further growth in the year ahead.”

Record first half for Supreme

Vape maker and distributor Supreme has reported a record performance as it registered growth across all its product categories.

Revenue growth of 63% to £105.1m in the six months to 30 September was helped by the distribution of ElfBar, which generated £26.4m of sales in the half.

The group experienced organice growth of 17% in vaping overall, with 17% growth also in the sports nutrition and wellness division and another 21% in lighting.

Adjusted EBITDA jumped 88% to £15.2m, while pre-tax profits rose 179% to £12.3m.

CEO Sandy Chadha called the half “another exceptional period of trading” for the group.

“This strong performance has been undoubtedly driven by our established vaping activities, alongside solid sales momentum across the remainder of the business,” he said.

“Looking ahead, the second half of the year is shaping up to be another significant period for Supreme.”

Pets at Home interims

Profits have tumbled in the first half at Pets at Home as it relaunched the brand, transitioned to a new distribution centre and invested in its ‘Petcare Platform’.

Underlying pre-tax profits fell 19.3% to £47.8m in the six months to 12 October, while statutory pre-tax profits slid 35.2% to £34.7m.

Revenues at the group increased 6.5% to £774.2m, with retail like-for-like sales up 5.2%. Retail sales took a hit in the second quarter due to availability issues linked to the new DC but had been “swiftly corrected” and normalised in Q3.

CEO Lyssa McGowan said the first half had been “a critical period in laying the foundations of our platform for future growth”.

“This was the period of high activity when we relaunched our brand, launched our new DC, built our new digital platform, and made progress expanding and improving our physical assets across retail and vets.

“This period has not been without challenges, but we have been able to manage these well and are on track to finish FY24 with a refreshed, modernised infrastructure, fit to deliver growth for many years to come.”

Morning shares

The FTSE opened down again this morning, dipping 0.3% to 7,440.21pts.

Greencore shares sank 2.7% to 98.8p as investors reacted to the annual results.

Supreme soared 13.2% higher to 124.5p on the back of a record first half, while Treatt also rose 3.9% to 467.6p and Pets at Home is up 0.6% to 289p.

Yesterday in the City

The FTSE 100 slipped 0.4% to 7,460.70pts as the week got underway.

There wasn’t much in the way of market news to drive share price movements, but risers included Glanbia, up 1.9% to €15.39, and Just Eat Takeaway, up 1.9% to 1,299p.

Naked Wines fell 3.9% to 33.7p and Nichols dropped 2.9% to 1,010p.