Greencore eyes further adjusted operating profit jump as revenue rises

(Alliance News) - Greencore Group PLC on Wednesday said that trading in the third quarter "remained robust" as it reported a swing to a pretax loss, amid an impact from the acquisition of Bakkavor.

The Dublin-based convenience food maker said pretax loss was GBP33.3 million in the half-year ended March 27, compared to a profit of GBP26.7 million a year ago.

Greencore shares fell 5.5% to 226.32 pence each on Wednesday morning in London.

The swing to a loss "was driven by the impact of the acquisition of Bakkavor with the recognition of one-off transaction related costs in exceptional items, the amortisation of customer relationship intangibles and higher interest costs arising from the drawdown of the acquisition financing facilities," Greencore said.

Greencore sealed the GBP1.2 billion buy of Bakkavor in January. Bakkavor makes fresh prepared food.

Operating costs before acquisition-related amortisation were 64% higher, at GBP427.3 million, compared to GBP260.7 million. Cost of sales increased 44% to GBP892.0 million from GBP620.7 million.

Revenue rose 43% to GBP1.32 billion from GBP922.0 million.

Greencore said trading in the third quarter "has remained robust," as it expects to deliver adjusted operating profit in line with current market expectations, citing a range of GBP227 million to GBP241 million with an average of GBP232 million. It would be sharply higher than GBP125.7 million in financial 2025, which had jumped 29% from adjusted operating profit of GBP97.5 million a year prior.

Chief Executive Officer Dalton Philips said: "The integration of Bakkavor is progressing well and to plan - and we are focused on bringing our 4,000-plus product portfolio and enhanced capabilities to our customers. We are firmly on track to deliver our target of annual cost synergies of at least GBP80 million within three years post-acquisition.

"While we continue to monitor macro developments and inflationary impacts from the events in the Middle East, we remain confident in the short-term mitigations we have in place and the outlook for the business."

The company will release a third-quarter trading statement on July 22.

By Tom Budszus, Alliance News slot editor

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