Convenience food producer Greencore has today raised its annual profit forecast for the second time in less than three months, boosted by strong demand for sandwiches and sushi and tight cost-control measures.
Greencore aims to expand its business through a planned £1.2 billion acquisition of UK peer Bakkavor, in addition to more food-to-go product launches and contracts with supermarkets.
The deal, announced in May, is expected to close next year subject to regulatory approval. Britain's competition watchdog is likely to disclose the outcome of its phase 1 investigation into the deal later this month.
Bakkavor makes around 3,500 different freshly prepared food products, including meals, salads, desserts, dips, sauces, sandwiches and pizza and bread products. It has been reshaping its businesses across the UK, China and the US to cope with steep costs, subdued consumer demand and reduced volumes.
Bakkavor's retail customers include Tesco, Marks & Spencer and Waitrose, while Greencore supplies all major UK supermarkets.
Greencore said today it now expects an adjusted operating profit of about £125m, up from its previous forecast of between £118-121m.
The revised figure surpassed market expectations of between £119.5m and £121.8m, according to a company-compiled consensus.
Revenue for the year is expected to come in at £1.95 billion, up nearly 8% from 2024.
In a trading update for its fourth quarter to the end of September, Greencore said that saw revenue growth seen throughout the year continued into the fourth quarter, driven by new business wins, new product innovation and favourable weather.
It noted that product innovation was a strong contributor to growth. 130 new products were launched during the fourth quarter, including a range of hot and cold food to go products for a new store format, an elevated mac and cheese range and premium cooking sauces.
Greencore chief executive Dalton Philips said the company had another "excellent" quarter in Q4, which rounded out an exceptional year.
"While there are wider economic headwinds, the strong performance means we are again upgrading our full year guidance," the CEO said.
"Our focus in the new financial year remains on producing high-quality, fresh food for consumers across the UK," he said.
"We look forward to completing the Bakkavor transaction, subject to regulatory approval, and remain excited about the potential of combining two great UK food businesses, enhancing our product offering for our customers and consumers," he added.
Greencore has its headquarters in Dublin, with a UK head office in Worksop and 14 factories across the UK.
The group supplies nearly 750 million food-to-go items each year and employs about 13,300 staff.
