Greencore Group shares slid 3.7% to 103.3p in late morning trading on Tuesday following a reported 35% growth in revenue to £486.2 million in Q3 2022.
The convenience foods group highlighted a 41% revenue climb to £333.4 million against the previous year, alongside a 23.5% rise to £152.9 million in other convenience food categories.
Greencore reported a pro forma revenue increase of 25.8% year-on-year, with a 31.2% growth in food to go and a 15.5% climb in other convenience food categories.
The group commented its pro forma revenues were driven by increased volumes, a low-teen percentage growth in underlying pricing and increased revenue in the company’s Irish ingredients trading sector.
The food producer said it noted limited demand impact in its categories, however it would continue to closely monitor the effect of increased prices on a consumer level.
Greencore highlighted constructive customer dialogue, price recovery mechanisms, supply chain management and operational efficiencies as its chosen methods to navigate inflationary costs and supply chain challenges.
The company also noted its intention to recommence value return of up to £50 million over the two years, starting with a share buyback programme, which is set to see it repurchase ordinary shares for a maximum aggregate consideration of £10 million.
FY 2022 guidance
Greencore said it was confident in its potential to deliver yearly volume growth and cashflow progression in its peak seasonal trading period in HY2.
The firm mentioned it currently expected a FY operating profit between £72 million and £77 million, and an adjusted EPS between 9.2p and 10p.
Greencore anticipated a net debt at the end of FY 2022 of approximately £200 million, with net debt: EBITDA below two times, as measured under financing agreements.
The group confirmed it would continue to monitor the impact of inflationary costs on consumer demand.
“I am encouraged by the progress we have made during Q3 against the backdrop of inflationary pressures for the industry,” said Greencore executive chair Gary Kennedy.
“Revenue and profit conversion through the period has been encouraging and we are confident in our ability to continue to manage the various industry challenges and end the year strongly.”
“Our leading market positions, close customer relationships and intense focus on efficiencies mean that we look to the future with optimism, and we expect to deliver a strong year on year improvement in profitability, cash flow and returns for FY22.”