Wednesday, November 26, 2014

News: Continued growth for Greencore in tough food sector

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Investment in the Rotherham operation of leading convenience food manufacturer, Greencore, has helped the Irish firm increase revenues and profits.

In its financial results for the year ended September 26 2014, the firm, which operates in the UK and increasingly in the US, reported that group sales were up 6% to £1.27bn with a 7% rise in full-year pre-tax profits to £44.4m.

Greencore has 28 sites in the UK and employ around 3,000 people in Yorkshire. Greencore Prepared Meals at Wales Bar in Rotherham is one of five sites in the Prepared Meals division and prepares quiches, ready meals and soups.

Greencore's Prepared Meals business produces chilled ready meals, chilled sauces, chilled soup and quiche for the major retailers in the UK. The business, like most of the categories in which it operates, is largely "own brand" label, although products are produced under license for the Weight Watchers brand. It represents approximately 20% of group revenue.

In a difficult sector, growth has been maintained with strong performance of the convenience or small store formats of its customers.

The annual report states "The chilled ready meals market experienced growth in FY14 of 2.1%, while the Italian chilled ready meals category, our principal sub-category, grew by 4.0%. This was a little disappointing given that the horsemeat scandal depressed the market so materially in the previous year. The quiche market grew by 1.4% in the year while chilled soup declined by 4.4% in the face of a mild winter.

"Revenue in the Prepared Meals business was 0.2% higher than in FY13. Revenue performance in chilled ready meals in the year was modestly ahead of the market. This was despite having exited certain product categories with our largest ready meals customer in Q1 before increasing our share in Italian ready meals from Q2. The growth was driven by successful customer relaunch activity with several key customers and the addition of a new ready meals customer.

"Quiche sales were lower year on year as one customer moved manufacture of some lines in house, while soup and sauce sales were broadly in line with the prior year."

The Dublin-based firm is investing £30m in its site in Northampton as it focuses on the "food to go" sector but the annual report highlights the level of investment at is Rotherham site. It said: "Over the past number of years, we have invested in our facility in Kiveton, increasing our ready meals, quiche and soup capacity. These investments were largely driven by secured business wins, supplemented by incremental investments in capacity to support future growth with existing and new customers.

"These investments are aligned with our strategy to have market leading positions in convenience food categories that are complementary to the food to go category.

"These investments facilitate deeper relationships with our customers to ensure we remain their supplier of choice and that we are in a position to support their future growth agendas."

Greencore produced 214 million prepared meals, quiches and packs of chilled soup in the financial year. The Rotherham facility bakes over a hundred thousand quiche a day and uses over 35 million eggs a year.

Greencore website

Images: Greencore

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