Convenience food manufacturer Greencore has reported a jump in pre-tax profits for the year to September 27 as its revenues for the year dipped.
The Dublin-headquartered, London-listed company said its group profit before tax rose by 36% to £61.5m from €45.2m the previous year, while its revenue fell by 5.6% to £1.807 billion from £1.913 billion after the disposal of its Trilby Trading business.
Greencore, which is the biggest pre-packed sandwich maker in the UK, said its basic earnings per share soared by over 40% to 10.1 pence from 7.2 pence.
The company said it would return to paying dividends and has proposed a full year dividend of two pence per share, which will be payable in February.
Greencore said that although it is early in the year and being mindful of the significant labour cost headwind announced in the UK Budget, it is encouraged by its underlying momentum.
It predicted that its labour costs will increase with the introduction of further national living wage increases and national insurance changes in the UK from April 2025. As a result of the increase in national insurance charges, its current estimate for FY25 is additional costs of about £7.5m.
"The group plans to offset the additional labour costs fully via further efficiency initiatives, alongside our usual inflation recovery measures in FY25. As a result, the group anticipates FY25 adjusted operating profit to be within the top half of the range of current market expectations," it added.
Dalton Philips, Greencore's chief executive, said the company delivered "excellent" progress against its key financial metrics and strategic priorities in FY24, underpinned by close customer
engagement in a period that continued to be defined by cost inflation and muted consumer confidence.
"Over the last 12 months we have remained focused on making high quality food, rebuilding our profitability, and positioning Greencore to be known as the UK's leading convenience foods manufacturer," the CEO said.
"We continue to make progress against each of our strategic objectives and are well positioned to continue this momentum in FY25 and over the longer term," he said.
"The group has maintained its strong financial discipline, with leverage reduced to 1.0x, while also returning a further £40m to shareholders and announcing an additional share buyback. I am also delighted that today marks a return to Greencore paying dividends," he said.
"The strength of our balance sheet will provide us with the ability to invest in the growth and efficiency of our business and to pursue M&A opportunities on a selective basis, while also enabling us to deliver increasing returns to shareholders," he added.
The company today also announced the launch of an additional £10m share buyback, given its strong balance sheet. Earlier this year it had committed to returning a further £50m to shareholders over the next 12 months and completed £40m of this return through share buyback by November 2024.
