Convenience food group Greencore has reported strong revenue momentum in the third quarter with revenue 53.1% above the previous year's levels and only 2.8% below equivalent pre-Covid levels in the third quarter of 2019.
In a trading update for the 13 weeks from March 26 to June 25, Greencore said it was seeing positive adjusted operating profit for the quarter, in line with management expectations.
It added that revenue momentum has remained encouraging in the first three trading weeks of July.
"Notwithstanding the supply chain and labour challenges impacting the broader UK food industry at present, the group is confident in its ability to deliver strong year on year profit and cashflow progression in the second half of the year," Greencore said.
The company said it now expects to generate full year adjusted operating profits of between £36m and £40m, compared to its previous guidance of above £32.5m.
Patrick Coveney, Greencore's chief executive, said the company was encouraged by the improvement in revenue, profitability and cash flow momentum in the third quarter and the early weeks of the fourth quarter.
"Against the backdrop of the UK economy reopening fully, we are rebuilding our economic model effectively and sustainably with all stakeholders, supported by our long-standing customer relationships and further enhanced by the new business wins we have secured this year," Mr Coveney said.
"The performance is underpinned in particular by the energy and dedication of our people. We have a strong position in the dynamic UK convenience food market and are confident about our medium-term prospects," the CEO added.
Greencore also said today that in partnership with the Co-op and Sainsbury's supermarkets, it will soon start "test and learn" trials of an all fibre plastic free recyclable sandwich skillet in stores across the UK.
Greencore is the biggest sandwich maker in the UK.
The packaging, which was developed in conjunction with ProAmpac and believed to be the first of its type in the world, marks the culmination of 18 months of research and development by Greencore.
The skillet will have a plastic-free window and be made entirely from paper-based material.
According to Greencore, consumers find it challenging to separate the plastic film from the packaging of a typical sandwich skillet, meaning that recycling rates are nowhere near as high as they could be.
It said the new skillet's all-paper construction will make the process much easier for consumers.
Subject to successful trials, which will start in September, and the proposition meeting performance criteria, roll-out of the new packaging will begin later in the year.
In time, Greencore said it expects to make these new packaging techniques available to the wider UK market.
Shares in the company moved higher in London trade today.