REG - Greencore Group PLC - Interim Results Statement
15/05/2025 07:00
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RNS Number : 7410I Greencore Group PLC 15 May 2025
INTERIM FINANCIAL REPORT
For the half year ended 28 March 2025
15 May 2025
Continued momentum with strong delivery against financial targets
in first half; upgrade to full year guidance
Greencore Group plc ("Greencore" or the "Group"), a leading manufacturer of
convenience foods in the UK, today issues its results for the half year ended
28 March 2025 ("H1 25") and an upgrade to its full year guidance. The Group
has also today separately announced it has agreed the terms of a recommended
acquisition of Bakkavor Group plc.
SUMMARY FINANCIAL PERFORMANCE(1)
H1 25 H1 24 Change
£m £m
Revenue 922.0 866.1 +6.5%
Pro Forma Revenue Growth +6.5%
Gross Margin 32.7% 32.5% +20bps
Adjusted EBITDA 73.1 55.9 +30.8%
Group Operating Profit 38.1 25.3 +50.6%
Adjusted Operating Profit 45.2 28.3 +59.7%
Adjusted Operating Margin 4.9% 3.3% +160 bps
Profit Before Taxation 26.7 14.7 +81.6%
Adjusted Profit Before Tax 34.8 16.9 +105.9%
Basic EPS (pence) 4.5 2.5 +80.0%
Adjusted EPS (pence) 6.1 2.8 +117.9%
Group Exceptional Items (after tax) (4.7) (1.3) -£3.4m
Free Cash Flow 37.8 (26.5) +£64.3m
Free Cash Flow Conversion 78.6% 36.7%
Net Debt (excluding lease liabilities) (136.2) (198.0) +£61.8m
Adjusted Net Debt: Adjusted EBITDA as per financing agreements(5) 0.8x 1.4x +0.6x
Return on Invested Capital ("ROIC") 13.1% 10.2% +290 bps
FINANCIAL HIGHLIGHTS
· Revenue growth of 6.5% to £922.0m, driven by net new business wins
impact of 2.9%, underlying volume and mix impact of 1.0% and the positive
impact of inflation recovery and price of 2.6%
· Strong growth in Adjusted Operating Profit of 59.7% to £45.2m,
driven by disciplined cost management through operational and commercial
excellence initiatives and continued growth with customers
· Free cash flow increased to £37.8m, alongside an increase in free
cash flow conversion
· Strong balance sheet at period end with Adjusted Net Debt (excluding
lease liabilities) to Adjusted EBITDA as per financing arrangements reducing
to 0.8x (H1 24: 1.4x)(5)
· Return on Invested Capital ("ROIC") increased significantly by
290bps, to 13.1%
· Upgrade to FY25 Adjusted Operating Profit guidance to a range of
£114-117m(2), bringing the Group to above pre-pandemic levels of
profitability
STRATEGIC & OPERATIONAL HIGHLIGHTS
· Overall volume growth of 2.5%, inclusive of net new business wins,
and underlying volume growth of 0.5%, ahead of the wider grocery market(3)
· Outstanding operational service levels of 99.1% achieved in H1 25(4)
· Continued focus on product innovation, with 270 new products launched
during H1 25
· New business won across food-to-go and in ambient grocery, which are
expected to be onboarded in Q3 and Q4 FY25
· Continued delivery of operational excellence programme, including
deployment of automation and proactive management of network utilisation
· "Making Business Easier" transformation programme continues to build
momentum and make progress to update the Group's IT infrastructure and improve
process efficiency
· UK pension scheme is still expected to achieve a fully funded
position by the end of September 2025, resulting in a reduction in annual
funding contributions of £9.8m
With the consent of Bakkavor Group plc, the UK Panel on Takeovers and Mergers
has confirmed that the foregoing statement in relation to FY25 Adjusted
Operating Profit (the "Profit Forecast") constitutes an ordinary course profit
forecast for the purposes of Note 2(b) to Rule 28.1 of the City Code on
Takeovers and Mergers (the "Takeover Code"), to which the requirements of Rule
28.1(c)(i) of the Takeover Code apply. The additional disclosures required by
the Takeover Code are set out in the Appendix to this announcement.
Dalton Philips, Chief Executive Officer, said:
"The Greencore team again made excellent progress in the first half of the
financial year, consistently delivering fresh, high quality convenience food
to our customers and their shoppers. By continuing to strengthen our core
business, we've accelerated our financial performance - enhancing returns,
improving margins and driving growth ahead of the market. We have built strong
momentum and remain committed to continued delivery.
Our strong first half performance was enabled by continued growth with
customers, innovative new products and disciplined cost management, including
through operational excellence and automation. The momentum and strength of
our business is a credit to all of our Greencore colleagues whose continued
dedication and focus has enabled us to deliver this performance.
While we are mindful of a challenging market environment, and with our
seasonally stronger second half still ahead of us, we now expect Adjusted
Operating Profit for FY25 to be ahead of previous guidance, in the range of
£114-117m(2)."
Presentation & Conference Call
A webcast and conference call for analysts and investors will take place at
7.45am on 15 May 2025. Registration and dial in details are available at
www.greencore.com/investor-relations/
(http://www.greencore.com/investor-relations/) . The materials will be
available following the presentation.
Basis of preparation
Details of the basis of preparation of the financial information within this
Interim Financial Report can be found in Note 1 to the attached financial
information.
Forward‐looking statements
Certain statements made in this document are, or may be deemed to be,
forward‐looking. These represent expectations for the Group's business,
and involve known and unknown risks and uncertainties, many of which are
beyond the Group's control. The Group has based these forward‐looking
statements on current expectations and projections about future events based
on information currently available to the Group. The forward-looking
statements contained in this document include statements relating to the
financial condition, results of operations, business, viability and future
performance of the Group and certain of the Group's plans and objectives.
These forward-looking statements include all statements that do not relate
only to historical or current facts and may generally, but not always, be
identified by the use of words such as 'will', 'aims', achieves',
'anticipates', 'continue', 'could', 'develop', 'should', 'expects', 'is
expected to', 'may', maintain', 'grow', 'estimates', 'ensure', 'believes',
'intends', 'projects', 'sustain', 'targets', or the negative thereof, or
similar future or conditional expressions, but their absence does not mean
that a statement is not forward-looking.
By their nature, forward-looking statements are prospective and involve risk
and uncertainty because they relate to events and depend on circumstances that
may or may not occur in the future and reflect the Group's current
expectations and assumptions as to such future events and circumstances that
may not prove accurate. A number of material factors could cause actual
results and developments to differ materially from those expressed or implied
by forward-looking statements. There may be risks and uncertainties that the
Group is unable to predict at this time or that the Group currently does not
expect to have a material adverse effect on its business. You should not place
undue reliance on any forward-looking statements. These forward-looking
statements are made as of the date of this announcement. The Group expressly
disclaims any obligation to publicly update or review these forward-looking
statements, whether as a result of new information, future events or
otherwise, other than as required by law.
1 The Group uses Alternative Performance Measures ('APMs') which are
non-IFRS measures to monitor the performance of its operations and of the
Group as a whole. These APMs along with their definitions are provided in the
Appendix to the Interim Results Statement.
2. Previous guidance communicated as part of Q2 FY25 trading update on 1
April 2025 was FY25 Adjusted Operating Profit of £112-115m.
3 Compared to Kantar grocery market performance for the 26 weeks to 23
March 2025.
4. Measured as the number of on time and in full orders as a percentage of
total orders
5 The definition of Adjusted Net Debt and Adjusted EBITDA as per financing
arrangements is as per the capital management section of Note 22 in the 2024
Annual Report.
For further information, please contact:
Dalton Philips Chief Executive Officer Tel: +353 (0) 1 605 1000
Catherine Gubbins Chief Financial Officer Tel: +353 (0) 1 605 1000
Colm Farrell Investor Relations Director Tel: +353 (0) 1 605 1000
Jonathan Neilan FTI Consulting Tel: +353 (0) 86 231 4135
Nick Hasell FTI Consulting Tel: +44 (0) 203 727 1340
About Greencore
We are a leading manufacturer of convenience foods in the UK and our purpose
is to make every day taste better. To help us achieve this we have a model
called The Greencore Way, which is built on the differentiators of Lasting
Partnerships, Great Food, Delivery Excellence, Sustainable Choices and People
at the Core - The Greencore Way describes both who we are and how we will
succeed.
We supply all of the major supermarkets in the UK. We also supply convenience
and travel retail outlets, discounters, coffee shops, foodservice and other
retailers. We have strong market positions in a range of categories including
sandwiches, salads, sushi, chilled snacking, chilled ready meals, chilled
soups and sauces, chilled quiche, ambient sauces, pickles and frozen Yorkshire
Puddings.
In FY24 we manufactured 748m sandwiches and other food to go products, 125m
chilled ready meals, and 204m bottles of cooking sauces, dips and table
sauces. We carry out more than 10,500 direct to store deliveries each day. We
have 16 world-class manufacturing sites and 17 distribution centres and
transport hubs in the UK, with industry-leading technology and supply chain
capabilities. We generated revenues of £1.8bn in FY24 and employ c.13,300
people. We are headquartered in Dublin, Ireland.
For further information go to www.greencore.com (http://www.greencore.com) or
follow Greencore on social media.
OPERATING REVIEW
Strategic developments
The Group's priorities continue to be guided by "The Greencore Way" strategic
framework, with a dual focus on:
· Strengthening our core through our commercial and operational
excellence programmes, portfolio returns management and a disciplined cost
management programme (i.e., "Horizon 2"); and
· Growing and expanding by building new future growth areas (i.e.,
"Horizon 3")
The Group delivered excellent progress against these strategic priorities in
H1 25. This was achieved by working closely with our customers and supply
partners, with operational service levels at 99.1% in H1 25(4). This included
similarly strong service levels over the important festive period.
Volume growth continued in H1 25, with overall volume growing 2.5%, inclusive
of net new business wins, and underlying volume growing 0.5% in H1 25, which
represented outperformance vs. the wider grocery market volume growth of
0.2%(3).
From a customer perspective, the Group successfully delivered new business
during the period, including the annualisation of the large ready meals
contract that was onboarded at the Kiveton site in late Q4 FY24. New business
was won in H1 25 across food-to-go and in ambient grocery, which are expected
to be on-boarded into the network across Q3 and Q4 FY25, which will improve
utilisation in the network and improve category returns.
This growth was enabled through continued focus on our commercial excellence
programme and new product development. The Group successfully launched 270 new
products in H1 25, helping to support the delivery of our customer and
category growth agendas. These included festive lines such as the "first to
market" Japanese-inspired sando sandwich, refreshes of in-store café ranges
for one of our largest customers and a new, innovative takeaway range of ready
meals from our Consett manufacturing site, designed to provide the takeaway
experience for consumers, but at home.
The Group continued to focus on its operational excellence programme, focused
on driving standardisation and reducing costs across our network. Our
productivity, measured in units per labour hour, increased 4% in H1 25
compared to H1 24 and we delivered or started 582 individual projects across
the network in H1 25. In particular, there were 19 individual
automation projects in H1 25, such as installing depositors to place
ingredients on our products, automating some of our manual cutting processes
and we continued to make progress in building our long-term roadmap for
automation.
The Group has remained focused on proactively managing returns across our
categories. Due to underlying growth and continued emphasis on efficiencies,
returns across categories have improved, in line with the improvement in the
Group ROIC. We continue to review all categories and sites to ensure they are
delivering, or on a path to deliver, against the Group's returns expectations.
In FY24, the Group initiated the "Making Business Easier" transformation
programme, aimed at driving consistency of business outcomes by streamlining
processes, integrating modern technology solutions, and leveraging data. In H1
25, the programme made strong strides in achieving quick wins, building
capabilities, and embedding itself within the organisation. For example, in H1
25, the Group introduced an autonomous negotiation solution and a streamlined
capital approval solution, both of which have simplified operations and
enhanced our ability to drive business outcomes.
In H1 25, the Group has continued to make progress towards our Better Future
Plan, with a particular focus on our energy, water, responsible sourcing and
Human Rights agendas. We have established strategies in each of the ten
priority areas, with clear business ownership through our Plan Owner Model. We
are also continuing our commitment to improve our data quality and in November
2024, we were able to report on our Sustainable Packaging KPIs for the first
time, as well as our Healthy and Sustainable Diets results.
Trading Performance
H1 25 H1 24
£m £m Change
Revenue 922.0 866.1 +6.5%
Group Operating Profit 38.1 25.3 +50.6%
Adjusted Operating Profit 45.2 28.3 +59.7%
Adjusted Profit Before Tax 34.8 16.9 +105.9%
Group reported revenue increased by 6.5% to £922.0m in H1 25, driven by net
new business wins impact of 2.9%, underlying volume and mix of 1.0% and the
positive impact of inflation recovery and price of 2.6%.
Overall, Group Operating Profit in H1 25 increased 50.6% to £38.1m and
Adjusted Operating Profit increased by 59.7% to £45.2m. Group Adjusted Profit
Before Tax was £34.8m in H1 25, compared to £16.9m in H1 24.
With the exception of labour costs and certain ingredient costs, the Group saw
a more normalised inflationary environment in H1 25. The majority of this
inflation was recovered or mitigated in the period, through a range of
mechanisms, including internal cost reductions, product and range
reformulations, alternative sourcing and pass-through of cost increases.
Labour costs will increase further with the introduction of government-driven
national living wage and national insurance increases in the UK from April
2025 onwards.
The Group's Food to Go categories comprise sandwiches, salads, sushi and
chilled snacking. Revenue in Food to Go categories totalled £611.4m and
accounted for approximately 66% of reported revenue. This represented an
increase of 5.6% in Food to Go revenue compared to H1 24. The Group
experienced underlying volume growth of 1.5% across the Food to Go category,
outperforming the wider market, however there was a weaker performance in the
salads product range in particular.
The Group's Other Convenience categories comprise activities in the chilled
ready meals, chilled soups and sauces, chilled quiche, ambient sauces and
pickles, and frozen Yorkshire Puddings. Reported revenue across these
categories increased by 8.1% to £310.6m in H1 25. The Group achieved a strong
volume performance in the chilled ready meals product range, increasing 1.8%
on an underlying basis. This was in addition to a strong underlying volume
performance across the Yorkshire puddings, chilled soup and sauce and bakery
ranges, however the ambient grocery product range saw a more challenging
performance.
Group Cash Flow and Returns
H1 25 H1 24
£m £m Change
Free Cash Flow 37.8 (26.5) +£64.3m
Net Debt (187.9) (243.9) +£56.0m
Net Debt (excluding lease liabilities) (136.2) (198.0) +£61.8m
Adjusted Net Debt: Adjusted EBITDA as per financing agreements(4) 0.8x 1.4x +0.6x
ROIC 13.1% 10.2% +290 bps
The Group continued to carefully manage both cash flows and leverage in H1 25,
in the context of recovering profitability, seasonal working capital outflows,
and capital expenditure to support future growth.
The Group recorded a Free Cash inflow of £37.8m in H1 25 compared to an
outflow of £26.5m in H1 24, due to higher operating cash flow and working
capital management. The Group's free cash flow conversion over the past 12
months increased to 78.6% from 36.7%.
The Group's Net Debt excluding lease liabilities at H1 25 was £136.2m, a
decrease of £61.8m compared to H1 24. The Group's Adjusted Net Debt: Adjusted
EBITDA leverage covenant as measured under financing agreements was 0.8x at
period end, compared to 1.4x at H1 24(5).
As at H1 25, the Group had total committed debt facilities of £430.6m, a
weighted average maturity of 3.9 years and cash and undrawn committed bank
facilities of £291.9m.
ROIC increased to 13.1% for the 12 months ended 28 March 2025, compared to
10.2% for H1 24. The year-on-year increase was driven primarily by increased
profitability in the 12-month period to 28 March 2025. Average invested
capital decreased year-on-year from £709.8m to £677.2m.
FINANCIAL REVIEW(1)
Revenue and Operating Profit
Reported revenue and Pro Forma Revenue Growth in the period was £922.0m, an
increase of 6.5% compared to H1 24, due to an increase in volume and mix year
on year as well as positive pricing impacts.
Group Operating Profit increased from £25.3m in H1 24 to £38.1m in H1 25 as
a result of the increased gross profit performance underpinned by the
operational and commercial initiatives implemented during the financial
period. Adjusted Operating Profit was £45.2m compared to £28.3m in H1 24.
Gross margin increased from 32.5% in H1 24 to 32.7%, an increase of 20 bps
year on year, while Adjusted Operating Margin was 4.9%, 160bps higher than in
H1 24.
Net finance costs
The Group's net bank interest cost was £9.4m in H1 25, a decrease of £1.3m
versus H1 24. The decrease was driven by lower cost of debt during H1 25. The
Group also recognised a £0.9m interest charge relating to the interest
payable on lease liabilities in the period (H1 24: £0.7m).
The change in the fair value of derivative financial instruments and related
debt adjustments including foreign exchange in the financial period was a
charge of £0.6m (H1 24: £1.4m credit) and the non-cash pension financing
charge of £0.4m (H1 24: £0.6m).
Profit before taxation
The Group's Profit before taxation of £26.7m in H1 25 increased from a profit
of £14.7m in H1 24. The increase was driven by higher Group Operating Profit
due to operational and commercial initiatives implemented during the financial
period, partly offset by higher finance costs. Adjusted Profit Before Tax in
the period was £34.8m compared to £16.9m in H1 24.
Taxation
The underlying adjusted Effective Tax Rate ('ETR') is 24% (H1 24: 24%) when
adjusted for the change in fair value of derivative financial instruments and
related debt adjustments and exceptional items included in the half year
period. The Group expects the annual ETR to be in line with the guidance rate
of c.23.0% - 24.5%.
Exceptional items
The Group had a pre‐tax exceptional charge of £5.6m in H1 25, and an
after-tax charge of £4.7m, comprised as follows:
Exceptional Items £m
Transformation costs (5.6)
Exceptional items (before tax) (5.6)
Tax on exceptional items 0.9
Exceptional items (after tax) (4.7)
The charge relates to costs incurred for the Group's transformation programme
launched in H1 24 focusing on transformation of the Group's technology
infrastructure and end-to-end processes.
Earnings per share
The Group's basic earnings per share for H1 25 was 4.5 pence compared to 2.5
pence in H1 24. This was driven by an £8.3m increase in profit attributable
to equity holders and a decrease in the weighted average number of shares in
issue in H1 25 to 436.0m (H1 24: 468.6m) primarily due to the impact of the
share buyback programme.
Adjusted Earnings were £26.5m in the period, £13.5m ahead of H1 24 largely
due to an increase in Adjusted Operating Profit partly offset by an increase
in interest and tax costs. Adjusted Earnings Per Share of 6.1 pence compared
to 2.8 pence in H1 24.
Cash Flow and Net Debt
Adjusted EBITDA was £17.2m higher in H1 25 at £73.1m. The Group reported a
net working capital inflow of £4.1m (H1 24: working capital outflow of
£43.2m). Maintenance Capital Expenditure of £12.1m was recorded in the
period (H1 24: £10.1m). In H1 25, the Group recorded Strategic Capital
Expenditure of £6.3m (H1 24: £2.5m). The cash outflow in respect of
exceptional charges was £5.8m (H1 24: £2.9m).
Interest paid in the period was £9.9m (H1 24: £10.1m), including interest of
£0.9m on lease liabilities (H1 24: £0.7m), an overall decrease of £0.2m on
H1 24 reflecting lower interest costs on borrowings offset by higher interest
costs for leases. The Group recognised tax paid of £1.5m (H1 24: £4.2m) in
the period. The cash tax payable by the Group will remain low due to the
availability of full expensing relief for capital expenditure. The Group's
effective tax rate will be higher than the cash tax rate in the medium term as
deferred tax liabilities will arise on assets where full expensing relief has
been claimed. The deferred tax liabilities will release over the useful life
of the assets. Cash repayments on lease liabilities were £6.9m (H1 24:
£8.4m). The Group's net cash funding for defined benefit pension schemes was
£6.9m (H1 24: £6.7m).
The Group made net share purchases of £15.6m in H1 25 reflecting the
completion of the Group's share buyback programme, which represents £5.6m of
cash transferred to a broker in FY24 and a further £10.0m cash outflow in H1
25. This compared to net share purchases of £15.2m in H1 24. A cash dividend
of £8.9m was paid to equity-holders of the Company during the period (H1 24:
£Nil).
The Group's Net Debt excluding lease liabilities at 28 March 2025 was
£136.2m, a decrease of £61.8m compared to the end of H1 24.
Financing
In December 2024, the Group further strengthened its balance sheet when it
extended the maturity on its £350m revolving credit facility by one year to
November 2029. As at 28 March 2025, the Group had total committed debt
facilities of £430.6m and a weighted average maturity of 3.9 years. These
facilities comprised:
· A £350m revolving credit banking facility with a maturity date
of November 2029
· A £50m bilateral bank facility with a maturity date of January
2026
· £9m and $28m of outstanding Private Placement Notes with
maturities ranging between June 2025 and June 2026
At 28 March 2025 the Group had cash and undrawn committed bank facilities of
£291.9m (H1 24: £246.0m).
Pensions
All of the Group's legacy defined benefit pension schemes are closed to future
accrual. The net pension deficit relating to legacy defined pension schemes,
before related deferred tax, at 28 March 2025 was £11.2m, £3.6m lower than
the position at 27 September 2024. The net pension deficit after related
deferred tax was £7.2m (FY24: £9.4m), comprising a net deficit on UK schemes
of £16.0m (FY24: £22.0m) and a net surplus on Irish schemes of £8.8m (FY24:
£12.6m).
The decrease in the Group's net pension deficit was driven principally by an
actuarial loss as a result of a change in financial assumptions, particularly
on the Irish schemes, offset by contributions paid to the UK schemes.
Separate to this IAS 19 Employee Benefits valuation, the valuations and
funding obligations of the Group's legacy defined benefit pension schemes are
assessed on a triennial basis with the relevant trustees. A full actuarial
valuation was carried out on the Irish scheme at 31 March 2022 and for the UK
defined benefit scheme at 31 March 2023. The Group expects the annual cash
funding requirement for all schemes to be approximately £12m - £15m in FY25.
The UK defined benefit scheme is still expected to achieve a fully funded
position on a triennial valuation basis by the end of September 2025.
Following discussions with the UK scheme's trustees, it has been agreed that
£9.8m of annual pension contributions from the Group will cease when the
fully funded position is achieved. The Group has engaged with the trustees of
the UK scheme and, relative to the liabilities on the triennial funding basis
the UK scheme is now 100% hedged for movements in gilt yields, reducing the
Group's exposure to risk. In addition, the Group is continuing to review all
pension schemes with a view to restructuring opportunities.
Principal risks and uncertainties
The Directors continue to assess the principal risks and uncertainties of the
Group on a frequent basis. The principal risks and uncertainties faced by the
business at 27 September 2024 are described in detail in the Risk Management
section of the Annual Report and Financial Statements for the year ended 27
September 2024 issued on 3 December 2024, a copy of which is available on the
Group's website.
A description of the principal risks and uncertainties as at 28 March 2025,
for the remaining six months of the FY25 financial year based on conditions as
at the half year date, are set out in the Appendix to the Interim Financial
Report.
Responsibility Statement
Each of the Directors of Greencore Group plc confirm that, to the best of each
person's knowledge and belief as required by the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority ('FCA'):
· The Financial Statements have been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted by the European Union;
· The Interim Management Report includes a fair review of important
events that have occurred during the first six months of the financial year,
and their impact on the condensed financial statements, and also contains a
description of the principal risks and uncertainties for the remaining six
months of the financial year; and
· The Interim Management Report includes a fair review of the
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last Annual Report that could
have a material effect on the financial position or performance of the Group
in the first six months of the current financial year.
The Board of Directors that served during the 26 weeks ended 28 March 2025,
and their respective responsibilities, can be found on pages 62 to 65 of the
Annual Report 2024. A list of current directors is maintained on the Greencore
Group plc website at:
https://www.greencore.com/about-us/group-structure/group-plc-board/
(https://www.greencore.com/about-us/group-structure/group-plc-board/) .
Dalton
Philips
Catherine Gubbins
Chief Executive
Officer
Chief Financial Officer
Date: 15 May
2025
Date: 15 May 2025
CONDENSED GROUP INCOME STATEMENT
for the half year ended 28 March 2025
Half year ended 28 March 2025 Half year ended 29 March 2024
(Unaudited) (Unaudited)
Notes Pre- exceptional Exceptional Total Pre- exceptional Exceptional Total
(Note 4)
(Note 4)
£m £m £m £m £m £m
Revenue 2 922.0 - 922.0 866.1 - 866.1
Cost of sales (620.7) - (620.7) (585.0) - (585.0)
Gross profit 301.3 - 301.3 281.1 - 281.1
Operating costs before acquisition-related amortisation (251.2) (1.5) (252.7)
(255.1) (5.6) (260.7)
Impairment of trade receivables (1.0) - (1.0) (1.6) - (1.6)
Group operating profit before acquisition related amortisation 2 28.3 (1.5) 26.8
45.2 (5.6) 39.6
Amortisation of acquisition-related intangibles (1.5) - (1.5) (1.5) - (1.5)
Group operating profit/(loss) 43.7 (5.6) 38.1 26.8 (1.5) 25.3
Finance income 5 0.5 - 0.5 0.5 - 0.5
Finance costs 5 (11.9) - (11.9) (11.1) - (11.1)
Profit/(loss) before taxation 32.3 (5.6) 26.7 16.2 (1.5) 14.7
Taxation 6 (7.8) 0.9 (6.9) (3.4) 0.2 (3.2)
Profit/(loss) for the financial period attributable to the equity holders 24.5 (4.7) 19.8 12.8 (1.3) 11.5
Earnings per share (pence)
Basic earnings per share 8 4.5 2.5
Diluted earnings per share 8 4.4 2.4
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
for the half year ended 28 March 2025
Half year ended Half year ended
28 March 2025 29 March 2024
(Unaudited) (Unaudited)
£m £m
Total comprehensive income for the financial period
Items that will not be reclassified to profit or loss:
Actuarial loss on Group legacy defined benefit pension schemes (2.9) (8.2)
Tax on Group legacy defined benefit pension schemes 0.2 1.0
(2.7) (7.2)
Items that may subsequently be reclassified to profit or loss:
Currency translation adjustment 0.1 (0.1)
Cash flow hedges:
fair value movement taken to equity 0.3 (0.9)
transferred to Income Statement for financial period (0.2) (2.5)
0.2 (3.5)
Other comprehensive income for financial period (2.5) (10.7)
Profit for the financial period 19.8 11.5
Total comprehensive income for the financial period attributable to equity 17.3 0.8
holders
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
as at 28 March 2025
March September
2025 2024
(Unaudited) (Audited)
Notes £m £m
ASSETS
Non-current assets
Goodwill and intangible assets 9 454.4 456.1
Property, plant and equipment 9 299.9 300.7
Right-of-use assets 9 47.1 41.4
Investment property 3.6 3.5
Retirement benefit assets 14 10.9 15.3
Deferred tax assets 27.3 30.2
Total non-current assets 843.2 847.2
Current assets
Inventories 62.5 66.4
Trade and other receivables 231.5 232.6
Cash and cash equivalents 11 87.9 57.3
Derivative financial instruments 12 - 0.5
Current tax receivable - 0.7
Total current assets 381.9 357.5
Total assets 1,225.1 1,204.7
EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital 10 4.4 4.5
Share premium 10 90.9 90.5
Other reserves 10 119.7 116.3
Retained earnings 237.3 238.9
Total equity 452.3 450.2
LIABILITIES
Non-current liabilities
Borrowings 12 92.9 147.6
Lease liabilities 34.4 31.3
Other payables 2.1 2.2
Derivative financial instruments 12 0.2 0.9
Provisions 13 6.6 6.8
Retirement benefit obligations 14 22.1 30.1
Deferred tax liabilities 27.9 27.5
Total non-current liabilities 186.2 246.4
Current liabilities
Borrowings 12 131.2 57.8
Trade and other payables 431.3 431.0
Lease liabilities 17.3 13.6
Derivative financial instruments 12 0.5 0.6
Provisions 13 1.8 1.9
Current tax payable 4.5 3.2
Total current liabilities 586.6 508.1
Total liabilities 772.8 754.5
Total equity and liabilities 1,225.1 1,204.7
CONDENSED GROUP STATEMENT OF CASH FLOWS
for the half year ended 28 March 2025
Half year ended Half year ended
28 March 2025 29 March 2024
Notes (Unaudited) (Unaudited)
£m £m
Profit before taxation 26.7 14.7
Finance income 5 (0.5) (0.5)
Finance costs 5 11.9 11.1
Exceptional items 4 5.6 1.5
Group operating profit before exceptional items 43.7 26.8
Depreciation and impairment of property, plant and equipment and right-of-use 9 27.6 26.7
assets
Amortisation of intangible assets 9 2.2 2.4
Employee share-based payment expense 3.3 3.1
Contributions to Group legacy defined benefit pension schemes 14 (6.9) (6.7)
Working capital movement 4.1 (43.2)
Other movements - 0.1
Net cash inflow from operating activities before exceptional items, interest, 74.0 9.2
and tax
Cash outflow related to exceptional items 4 (5.8) (2.9)
Interest paid (including lease liability interest) (9.9) (10.1)
Tax paid (1.5) (4.2)
Net cash inflow/(outflow) from operating activities 56.8 (8.0)
Cash flow from investing activities
Purchase of property, plant and equipment 9 (17.9) (12.0)
Purchase of intangible assets 9 (0.5) (0.6)
Net cash outflow from investing activities (18.4) (12.6)
Cash flow from financing activities
Proceeds from issue shares 10 0.4 -
Ordinary shares purchased - own shares 10 - (0.2)
Capital return via share buyback 10 (10.0) (15.0)
Repayment of bank borrowings 12 (5.5) -
Drawdown of bank borrowings 12 - 32.3
Repayment of lease liabilities (6.9) (8.4)
Dividends paid to equity holders of the company 7 (8.9) -
Net cash (outflow)/inflow from financing activities (30.9) 8.7
Net increase/(decrease) in cash and cash equivalents and bank overdrafts 7.5 (11.9)
Reconciliation of opening to closing cash and cash equivalents and bank
overdrafts
Cash and cash equivalents and bank overdrafts at beginning of the financial 11 14.4 32.8
period
Translation adjustment - 0.1
Net increase/(decrease) in cash and cash equivalents and bank overdrafts 7.5 (11.9)
Cash and cash equivalents and bank overdrafts at end of the financial period 11 21.9 21.0
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
for the half year ended 28 March 2025
Share Share premium Other reserves Retained earnings Total
capital equity
£m £m £m £m £m
At 27 September 2024 4.5 90.5 116.3 238.9 450.2
Total comprehensive income for the financial period
Actuarial loss on Group legacy defined benefit pension schemes - - - (2.9) (2.9)
Tax on Group legacy defined benefit pension schemes - - - 0.2 0.2
Currency translation adjustment - - 0.1 - 0.1
Cash flow hedge fair value movement taken to equity - - 0.3 - 0.3
Cash flow hedge transferred to Income Statement - - (0.2) - (0.2)
Profit for the financial period - - - 19.8 19.8
Total comprehensive income for the financial period - - 0.2 17.1 17.3
Transactions with equity holders of the Company
Contributions and distributions
Employee share-based payment expense - - 3.3 - 3.3
Exercise, lapse or forfeit of share-based payments 0.0 0.4 (1.3) 1.3 0.4
Shares acquired by Employee Benefit Trust - - (0.1) 0.1 -
Transfer to Retained Earnings on grant of shares to beneficiaries of the
Employee Benefit Trust
- - 1.2 (1.2) -
Capital return via share buyback (0.1) - 0.1 (10.0) (10.0)
Dividends - - - (8.9) (8.9)
Total transactions with equity holders of the Company (0.1) 0.4 3.2 (18.7) (15.2)
At 28 March 2025 4.4 90.9 119.7 237.3 452.3
Share Share premium Other reserves Retained earnings Total
capital equity
£m £m £m £m £m
At 29 September 2023 4.8 89.7 120.8 244.5 459.8
Total comprehensive income for the financial period
Actuarial loss on Group legacy defined benefit pension schemes - - - (8.2) (8.2)
Tax on Group legacy defined benefit pension schemes - - - 1.0 1.0
Currency translation adjustment - - (0.1) - (0.1)
Cash flow hedge fair value movement taken to equity - - (0.9) - (0.9)
Cash flow hedge transferred to Income Statement - - (2.5) - (2.5)
Profit for the financial period - - - 11.5 11.5
Total comprehensive income for the financial period - - (3.5) 4.3 0.8
Transactions with equity holders of the Company
Contributions and distributions
Employee share-based payment expense - - 3.1 - 3.1
Exercise, lapse or forfeit of share-based payments - - (0.8) 0.8 -
Shares acquired by Employee Benefit Trust - - (0.2) - (0.2)
Transfer to Retained Earnings on transfer of shares to - - 0.2 (0.2) -
beneficiaries of the Employee Benefit Trust
Capital return via share buyback (0.1) - 0.1 (15.0) (15.0)
Total transactions with equity holders of the Company (0.1) - 2.4 (14.4) (12.1)
At 29 March 2024 4.7 89.7 119.7 234.4 448.5
OTHER RESERVES
Share-based Own Undenominated capital reserve Hedging reserve Foreign currency translation reserve Total
payment Shares
reserve
£m £m £m £m £m £m
At 27 September 2024 7.5 (10.6) 121.2 (0.2) (1.6) 116.3
Total comprehensive income for the financial period
Currency translation adjustment - - - - 0.1 0.1
Cash flow hedge fair value movement taken to equity - - - 0.3 - 0.3
Cash flow hedge transferred to Income Statement - - - (0.2) - (0.2)
Total comprehensive income for the financial period - - - 0.1 0.1 0.2
Transactions with equity holders of the Company
Contributions and distributions
Employee share-based payment expense 3.3 - - - - 3.3
Exercise, lapse or forfeit of share-based payments (1.3) - - - - (1.3)
Shares acquired by Employee Benefit Trust - (0.1) - - - (0.1)
Transfer to retained earnings on grant of shares to - 1.2 - - - 1.2
beneficiaries of the Employee Benefit Trust
Capital return via share buyback - - 0.1 - - 0.1
Total transactions with equity holders of the Company 2.0 1.1 0.1 - - 3.2
At 28 March 2025 9.5 (9.5) 121.3 (0.1) (1.5) 119.7
Share-based Own Undenominated capital reserve Hedging reserve Foreign currency translation reserve Total
payment Shares
reserve
£m £m £m £m £m £m
At 29 September 2023 4.1 (6.4) 120.9 3.5 (1.3) 120.8
Total comprehensive income for the financial period
Currency translation adjustment - - - - (0.1) (0.1)
Cash flow hedge fair value movement taken to equity - - - (0.9) - (0.9)
Cash flow hedge transferred to Income Statement - - - (2.5) - (2.5)
Total comprehensive income for the financial period - - - (3.4) (0.1) (3.5)
Transactions with equity holders of the Company
Contributions and distributions
Employee share-based payment expense 3.1 - - - - 3.1
Exercise, lapse or forfeit of share-based payments (0.8) - - - - (0.8)
Share acquired by Employee Benefit Trust - (0.2) - - - (0.2)
Transfer to Retained Earnings on grant of shares to beneficiaries of the - 0.2 - - - 0.2
Employee Benefit Trust
Capital return via share buyback - - 0.1 - - 0.1
Total transactions with equity holders of the Company 2.3 - 0.1 - - 2.4
At 29 March 2024 6.4 (6.4) 121.0 0.1 (1.4) 119.7
NOTES TO THE CONDENSED GROUP FINANCIAL STATEMENTS
1. Basis of preparation
The Condensed Group Financial Statements of Greencore Group plc (the 'Group'),
which are presented in sterling and expressed in millions, unless otherwise
indicated, have been prepared as at, and for the 26 week period ended, 28
March 2025, and have been prepared in accordance with the Disclosure Guidance
and Transparency Rules of the Financial Conduct Authority ('FCA') and IAS 34
Interim Financial Reporting as adopted by the European Union.
These Condensed Group Financial Statements do not comprise statutory accounts
within the meaning of Section 340 of the Irish Companies Act 2014. These
Condensed Group Financial Statements for the six-month period ended 28 March
2025 and the comparative amounts for the six-months ended 29 March 2024 are
unaudited and have not been reviewed by the Group's auditor. The condensed
financial information for the year ended 27 September 2024 represents an
abbreviated version of the Group Financial Statements for that year. Those
financial statements, upon which the auditor issued an unqualified audit
report have been filed with the Registrar of Companies.
Going concern
The Directors, after making enquiries and having considered the business
activities of the Group as set out on pages 1 to 8 and the principal risks and
uncertainties as set out on page 31, have a reasonable expectation that the
Group has adequate resources to continue operating as a going concern for the
foreseeable future.
In the current period, the Group's performance has continued to improve,
demonstrated through the strong H1 FY25 results with a growth in Adjusted
Operating Profit of £16.9m versus H1 FY24, with no material uncertainties
identified for the next 18 months from the half-year end date. Furthermore a
one-year extension of the Group debt facilities was agreed in December 2024
extending the maturity date to November 2029. The Group therefore has retained
financial strength and flexibility, together with strong trading relationships
with its customers and suppliers. Consequently, the Directors believe that the
Group is well placed to manage its business risks successfully.
For the purpose of the going concern assessment, the Group have used the
latest internally approved forecasts and strategic plan as a base case which
takes into account the Group's current position and future prospects. The
Group have used this to produce downside and severe downside scenarios which
consider the potential impact of commercial risks materialising which would
result in a decrease in volume along with under delivery of targets set out
under the Group's commercial and operational initiatives, which includes near
term climate related expenditure. The impact on revenue; profit; and cashflow
are modelled, including the consequential impact on working capital and bank
covenants. Based on the forecast cashflows, throughout the 18-month period to
September 2026, the Group is satisfied that it has sufficient resources
available and has adequate headroom to meet covenant requirements and if
needed, the Group could employ mitigants within its control, which would
include a reduction in non-business critical capital projects and other
discretionary cash flow items.
As a result, the Directors believe the Group has sufficient liquidity to
manage through a range of different cashflow scenarios over the next 18 months
from the half year end date. Accordingly, the Directors adopt the going
concern basis in preparing these Group Financial Statements.
Accounting Policies
The accounting policies and methods of computation adopted in the preparation
of the Condensed Group Financial Statements are consistent with those applied
in the Annual Report for the financial year ended 27 September 2024 and are as
set out in those financial statements.
The following changes to IFRS became effective for the Group during the
financial period but did not result in material changes to the Condensed Group
Financial Statements:
· Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
Leases
· Classification of liabilities as Current or Non-Current and
Non-current Liabilities with Covenants - Amendments to IAS 1 Presentation of
Financial Statements
· Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures - Supplier Finance Arrangements
The Group has not applied new standards, amendments and interpretations to
existing standards that have been issued but are not yet effective. The Group
is currently in the process of reviewing the potential impact of those
amendments.
Significant Accounting Estimates and Judgements
The preparation of the Condensed Group Financial Statements requires
management to make certain estimates, assumptions and judgements that affect
the application of accounting policies and the reported amount of assets,
liabilities, income and expenses. Estimates and underlying assumptions are
reviewed on an ongoing basis. Changes in accounting estimates may be necessary
if there are changes in circumstances on which the estimate was based or as a
result of new information or more experience. Such changes are reflected in
the period in which the estimate was revised.
In preparing the Condensed Group Financial Statements, the material judgements
made by management in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those applied to the
Consolidated Financial Statements for the 52 weeks ended 27 September 2024.
2. Segment Information
Convenience Foods is the Group's operating segment, which represents its
reporting segment. This reflects the Group's organisational structure and the
nature of the financial information reported to and assessed by the Chief
Operating Decision Maker ('CODM') as defined by IFRS 8 Operating Segments. The
CODM has been identified as the Group's Board of Directors.
The segment incorporates convenience food categories including sandwiches,
salads, sushi, chilled snacking, chilled ready meals, chilled soups and
sauces, chilled quiche, ambient sauces, pickles and frozen Yorkshire Puddings.
Convenience Foods
Half year Half year
2025 2024
£m £m
Revenue 922.0 866.1
Group operating profit before exceptional items and amortisation of 28.3
acquisition related intangible assets
45.2
Amortisation of acquisition-related intangible assets (1.5) (1.5)
Group operating profit before exceptional items 43.7 26.8
Finance income 0.5 0.5
Finance costs (11.9) (11.1)
Exceptional items (5.6) (1.5)
Taxation (6.9) (3.2)
Profit for the financial period 19.8 11.5
The following table disaggregates revenue by product categories in the
Convenience Foods reporting segment:
Half year 2025 Half year 2024
£m £m
Revenue for Convenience Foods
Food to go categories 611.4 578.9
Other convenience categories 310.6 287.2
Total revenue 922.0 866.1
Food to go categories include sandwiches, salads, sushi and chilled snacking
while the other convenience categories include chilled ready meals, chilled
soups and sauces, chilled quiche, ambient sauces and pickles and frozen
Yorkshire Puddings.
3. Seasonality
The Group's convenience foods portfolio is seasonal in nature with the Group's
business being weighted towards the second half of the year. This weighting is
primarily driven by weather and seasonal buying patterns.
4. Exceptional Items
Half Year 2025 Half Year 2024
£m £m
Transformation costs (A) (5.6) (1.5)
Total exceptional items before taxation (5.6) (1.5)
Tax credit on exceptional items 0.9 0.2
Total exceptional items (4.7) (1.3)
(A) Transformation costs
Transformation costs relate to a multi-year transformation programme, which
commenced in the prior financial year. In the current period, the Group
recognised a charge of £5.6m in costs related to progressing this programme,
these costs included consultancy and internal labour costs (H1 24: £1.5m).
Cash Flow on Exceptional Items
The total net cash outflow during the period in respect of operating
activities exceptional items was £5.8m (H1 24: £2.9m), of which £0.9m was
in respect of prior year exceptional charges (H1 24: £1.4m).
5. Finance income and finance costs
Half year Half year
2025
2024
£m £m
Finance income
Interest on bank deposits 0.5 0.5
Total finance income 0.5 0.5
Finance costs
Finance costs on interest bearing cash and cash equivalents, borrowings and (9.9) (11.2)
other financing costs
Interest on lease obligations (0.9) (0.7)
Net pension financing charge (0.4) (0.6)
Unwind of discount (0.1) -
Change in fair value of derivative financial instruments and related debt (0.5) 1.5
adjustments
Foreign exchange on inter-company and external balances where hedge accounting (0.1) (0.1)
is not applied
Total finance costs (11.9) (11.1)
6. Taxation
Interim period tax is accrued using the tax rate that is estimated to be
applicable to expected total annual earnings in the financial year based on
tax rates that were enacted or substantively enacted for the period ended 28
March 2025.
The adjusted effective tax rate ('adjusted ETR') applicable for the period
ended 28 March 2025 is 24% (H1 24: 24%) when adjusted for the change in fair
value of derivative financial instruments and related debt instruments and
exceptional items included in the half year period.
Factors that may impact future tax charges
The Group is within the scope of the OECD Pillar Two model rules. Pillar Two
legislation was enacted in Ireland on 18 December 2023 and the Income
Inclusion Rule applies to accounting periods beginning on or after 1 January
2024. The Group falls within the scope of Pillar Two legislation for the
current financial year ended 26 September 2025. Under the new legislation,
groups are liable to assess their effective tax rate (according to complex new
rules) in each jurisdiction that they operate. If the effective tax rate in
any jurisdiction is less than the 15% minimum rate top up taxes will be
payable. The Group are expecting to fall within an initial phase of
international activity exclusion, as set out in S111AY TCA 1997, in Ireland.
In other jurisdictions, the Group is expecting to meet the safe harbour
provisions such that top up taxes should not be payable in the year ending in
September 2025.
The IASB issued amendments to IAS 12 in "International Tax Reform - Pillar Two
Model Rules" in May 2023. This included a temporary exception which can be
applied for the recognition and disclosure in respect of deferred tax assets
and liabilities related to Pillar Two income taxes. There is also an exemption
in the tax legislation that means the Group is unlikely to be liable to top-up
taxes. The application of this tax exemption means that no current tax
liabilities are anticipated in respect of Pillar Two. As such no disclosures
have been made for current or deferred taxes.
7. Dividends Paid and Proposed
A dividend of 2.00 pence per share was approved at the Annual General Meeting
on 30 January 2025 as a final dividend in respect of the year ended 27
September 2024 and a total of £8.9m was paid on 6 February 2025 to all
shareholders.
The Group will not be proceeding with an interim FY25 dividend payment.
8. Earnings per Ordinary Share
In the current period, the Group repurchased 8,180,701 Ordinary Shares in the
Company, by way of a share buyback, costing £15.6m. These shares were
immediately cancelled. Of the £15.6m, £5.6m had been transferred to the
independent broker to complete the share buyback in the previous financial
year but had not been transacted at year end. In H1 25 an additional £10m was
transferred to the independent broker. These funds were fully transacted in H1
25 to complete the share buyback programme. The effect of this on the weighted
average number of ordinary shares was a decrease of 4,901,818 shares.
Numerator for earnings per share calculations
Half year Half year
2025
2024
£m £m
Profit attributable to equity holders of the Company 19.8 11.5
Denominator for earnings per share calculations
Half year Half year
2025
2024
'000 '000
Shares in issue at the beginning of the period 449,386 483,454
Effect of shares held by Employee Benefit Trust (8,749) (6,937)
Effect of share buyback and cancellation in the period (4,902) (7,870)
Effect of shares issued in the period 267 2
Weighted average number of Ordinary Shares in issue during the financial 436,002 468,649
period
Dilutive effect of share options 12,055 6,010
Weighted average number of Ordinary Shares for diluted earnings per share 448,057 474,659
A total of 13,062,470 (March 2025: 15,002,468) unvested shares were excluded
from the diluted earnings per share calculation as they were either
antidilutive or contingently issuable Ordinary Shares which had not satisfied
the performance conditions attaching at 28 March 2025.
Earnings per Share Calculations
Half year Half year
2025
2024
Pence pence
Basic earnings per Ordinary Share 4.5 2.5
Diluted earnings per Ordinary Share 4.4 2.4
9. Goodwill and Intangible Assets, Property, Plant and
Equipment, Right-of-use assets and Capital Expenditure Commitments
During the six-month period to 28 March 2025, the Group made £19.3m of
additions to property, plant and equipment and intangible assets through
ongoing capital expenditure (cash outflow £18.4m), while £0.4m of assets
were impaired. In addition, the Group made £14.0m of additions to
right-of-use assets while £0.3m were disposed of. A total depreciation and
amortisation charge was recognised in the period of £29.4m including £2.2m
on intangible assets (including amortisation of acquisition related intangible
assets), £19.2m on property, plant and equipment and £8.0m on right-of-use
assets.
During the six-month period to 29 March 2024, the Group made £13.0m of
additions to property, plant and equipment and intangible assets through
ongoing capital expenditure (cash outflow £12.6m), while £0.3m of assets
were impaired. In addition, the Group made £9.6m of additions to right-of-use
assets while £0.1m were disposed of. A total depreciation and amortisation
charge was recognised in the period of £29.1m including £2.4m on intangible
assets (including amortisation of acquisition related intangible assets),
£19.1m on property, plant and equipment and £7.6m on right-of-use assets.
At 28 March 2025, the Group had capital expenditure commitments that had been
contracted but not yet provided for amounting to £12.2m (H1 24: £8.9m).
10. Equity Share Capital
Share capital and share premium
Issued capital as at 28 March 2025 amounted to £4.4m (27 September 2024:
£4.5m). In the six-month period to 28 March 2025 there were 416,297 shares
(H1 24: 15,126) granted under the Group's ShareSave scheme exercised with a
nominal value of £0.004m (H1 24: £0.0002m) and share premium of £0.4m (H1
24: £0.02m).
Furthermore, as part of the share buyback programme during the financial
period, Greencore Group plc purchased and subsequently cancelled 8,180,701 (H1
24: 15,438,604) Ordinary Shares at a nominal value of £0.1m (H1 24: £0.1m).
The cash cost was £15.6m, of which £5.6m had been transferred to the
independent broker to complete the share buyback in the previous financial
year but had not been transacted. In H1 25 an additional £10m was transferred
to the independent broker. These funds were fully transacted in H1 25 to
complete the share buyback programme.
Own share reserve
Pursuant to the Annual Bonus Plan, Restricted Share Plan and the Performance
Share Plan the Trustees of the plans utilised dividend income of £0.1m to
acquire 47,205 shares in Greencore with a nominal value of £0.0005m. During
the period, 1,454,350 shares with a historic cash cost of £1.2m and nominal
value of £0.01m were transferred to beneficiaries of the Annual Bonus Plan,
Restricted Share Plan, Employee Share Incentive Plan and the Performance Share
Plan.
In the prior financial half year period, pursuant to the Annual Bonus Plan,
Restricted Share Plan and the Performance Share Plan, 116,392 shares were
purchased by the Trustees of the Plan during the period ended 29 March 2024 at
a cash cost of £0.2m and a nominal value of £0.001m. In H1 24 279,252 shares
with a cash cost of £0.2m and a nominal value of £0.003m were transferred to
beneficiaries of the Annual Bonus Plan.
11. Cash and cash equivalents and bank overdrafts
For the purposes of the Condensed Group Statement of Cash Flows, cash and cash
equivalents and bank overdrafts are presented net as follows:
March September 2024 March
2025
2024
£m £m £m
Cash at bank and in hand 87.9 57.3 108.9
Bank overdraft (Note 12) (66.0) (42.9) (87.9)
Total cash and cash equivalents and bank overdrafts 21.9 14.4 21.0
12. Borrowings and Derivative Financial Instruments
March September 2024 March
2025
2024
£m £m £m
Current
Bank overdrafts (66.0) (42.9) (87.9)
Bank borrowings (49.9) - -
Private placement notes (15.3) (14.9) (15.5)
Total current borrowings (131.2) (57.8) (103.4)
Non-current
Bank borrowings (77.6) (132.6) (172.4)
Private placement notes (15.3) (15.0) (31.1)
Total non-current borrowings (92.9) (147.6) (203.5)
Total borrowings (224.1) (205.4) (306.9)
The maturity profile of the Group's borrowings is as follows:
March September 2024 March
2025
2024
£m £m £m
Less than 1 year (131.2) (57.8) (103.4)
Between 1 and 2 years (15.3) (64.8) (65.4)
Between 2 and 5 years (77.6) (82.8) (138.1)
(224.1) (205.4) (306.9)
Bank Borrowings
The Group's bank borrowings net of finance fees comprised of £127.5m at 28
March 2025 (September 2024: £132.6m) with maturities ranging from January
2026 to November 2029. The Group had £270.0m (September 2024: £265.0m) of
undrawn committed bank facilities in respect of which all conditions precedent
had been met.
Uncommitted facilities undrawn at 28 March 2025 amounted to £5.0m (September
2024: £5.0m).
Private Placement Notes
The Group's outstanding Private Placement Notes net of finance fees comprised
of £30.6m (denominated as $28.0m and £9.0m) at 28 March 2025 (September
2024: £29.9m, denominated as $28.0m and £9.0m). These were issued as fixed
rate debt in June 2016 ($55.9m and £18.0m) with maturities ranging between
June 2023 and June 2026. The Group have repaid $28.0m and £9.0m to date
including $14.0m and $4.5m which were paid in June 2024.
In December 2018, the Group entered into cross-currency interest rate swap
arrangements for the original debt of $55.9m of private placement notes, to
swap from fixed rate US dollar to fixed rate sterling. The fixed rate US
dollar to fixed rate sterling swaps are designated as cash flow hedges.
Drawn and undrawn borrowings facilities
The table below sets out the split between drawn and undrawn borrowings
amounts as at 28 March 2025:
Maturity dates Net borrowings Mar-25 Undrawn committed bank facilities Total facilities available
£m £m £m
Cash and cash equivalents and bank overdrafts - 21.9 (21.9) -
Bank Borrowings* Jan-26 - Nov-29 (130.0) (270.0) (400.0)
Private Placement Notes* Jun-25 - Jun-26 (30.6) - (30.6)
Total (138.7) (291.9) (430.6)
*excludes capitalised finance fees
Fair Value of financial instruments at amortised cost
Except as set out below, it is considered that the carrying amounts of
financial assets and financial liabilities recognised at amortised cost in the
condensed consolidated interim financial statements approximate their fair
values:
March 2025 September 2024 March 2024
Carrying amount Fair Carrying amount Fair Carrying amount Fair
Value Value Value
£m £m £m £m £m £m
Bank borrowings** (127.5) (127.4) (132.6) (132.6) (172.4) (173.2)
Private Placement Notes (30.6) (30.3) (29.9) (29.5) (46.6) (45.9)
**excludes bank overdrafts
Derivative financial instruments fair value hierarchy - IFRS 13 (level 2
inputs)***
March 2025 September 2024 March 2024
Level 2*** Level 2*** Level 2***
£m £m £m
Non-current
Assets carried at fair value
Cross currency interest rate swaps - cash flow hedges - - 0.2
- - 0.2
Current
Assets carried at fair value
Interest rate swaps - not designated as cash flow hedges - 0.5 1.5
- 0.5 1.5
Non-current
Liabilities carried at fair value
Interest rate swaps - cash flow hedges - (0.5) (0.3)
Cross-currency interest rate swaps - cash flow hedges (0.2) (0.4) -
(0.2) (0.9) (0.3)
Current
Liabilities carried at fair value
Interest rate swaps - cash flow hedges (0.2) - -
Forward foreign exchange contracts - not designated as hedges - (0.1) -
Cross-currency interest rate swaps - cash flow hedges (0.3) (0.5) -
(0.5) (0.6) -
Total (0.7) (1.0) 1.4
*** For definition of level 2 inputs please refer to the 2024 Annual Report.
13. Provisions
Half year
March 2025
£m
At beginning of financial period 8.7
Utilised in financial period (0.2)
Released in the financial period (0.2)
Unwind of discount to present value in the financial period 0.1
At end of period 8.4
March September
2025 2024
£m £m
Analysed as:
Non-current liabilities 6.6 6.8
Current liabilities 1.8 1.9
8.4 8.7
14. Retirement Benefit Obligations
The Group operates defined contribution pension schemes in all of its main
operating locations. The Group also has legacy defined benefit schemes, which
were closed to future accrual on 31 December 2009.
Legacy defined benefit pension schemes
The Group operates one legacy defined benefit pension scheme and one legacy
defined benefit commitment in Ireland (the 'Irish schemes') and one legacy
defined benefit pension scheme and one legacy defined benefit commitment in
the UK (the 'UK schemes'). The Projected Unit Credit actuarial cost method has
been employed in determining the present value of the defined benefit pension
obligation, the related current service cost and, where applicable, past
service cost.
Scheme assets are held in separate Trustee administered funds. These plans
have broadly similar regulatory frameworks. The Group continues to seek ways
to reduce its liabilities through various restructuring initiatives in
co-operation with the respective schemes.
In consultation with the independent actuaries to the scheme, the valuation of
pension obligations have been updated to reflect current market discount
rates, rates of increase in salaries, pension payments and inflation, current
market values of investments and actual investment returns.
The Group's retirement benefit obligations moved from a net liability of
£9.4m at 27 September 2024 to a net liability of £7.2m at 28 March 2025.
This movement was primarily driven by an actuarial loss as a result of a
change in financial assumptions, particularly on the Irish schemes, offset by
contributions paid to the UK schemes.
The UK legacy defined benefit pension scheme is expected to achieve a fully
funded position on a triennial funding valuation basis by the end of September
2025. Following discussions with the UK scheme's trustees, it has been agreed
that £9.8m of annual pension contributions from the Group will cease when the
fully funded position is achieved. In addition, the Group is continuing to
review all pension schemes with a view to restructuring opportunities.
The principal actuarial assumptions are as follows:
March September
2025
2024
UK Ireland UK Ireland
Rate of increase in pension payments * 2.95% 1.50% 2.95% 1.00%
Discount rate 5.80% 3.70% 5.05% 3.38%
Inflation rate ** 3.15% 2.00% 3.15% 1.90%
* The pension increase in pension payments applies to the majority of the
liability base, however there are certain categories within the Group's Irish
schemes that have an entitlement to pension indexation.
** The assumptions for Retail Price Index ('RPI') and Consumer Price Index
('CPI') are derived from the Harmonised Index of Consumer Prices ('HICP') and
relative yields of index-linked and fixed interest government
The financial position of the schemes was as follows:
March 2025 September 2024
UK Irish Schemes Total UK Irish Schemes Total
Schemes
Schemes
£m £m £m £m £m £m
Fair value of plan assets 170.0 130.3 300.3 181.0 140.0 321.0
Present value of scheme liabilities (191.4) (120.1) (311.5) (210.4) (125.4) (335.8)
(Deficit)/surplus in schemes (21.4) 10.2 (11.2) (29.4) 14.6 (14.8)
Deferred tax asset/(liability) 5.4 (1.4) 4.0 7.4 (2.0) 5.4
Net (liability)/asset at end of the period (16.0) 8.8 (7.2) (22.0) 12.6 (9.4)
Presented as:
Retirement benefit asset*** - 10.9 10.9 - 15.3 15.3
Retirement benefit obligation (21.4) (0.7) (22.1) (29.4) (0.7) (30.1)
*** The value of a net pension benefit asset is the value of any amount the
Group reasonably expects to recover by way of refund of surplus from the
remaining assets of a plan at the end of the plan's life.
Sensitivity of pension liability to judgemental assumptions
Increase/(decrease)
in Scheme Liabilities
Assumption Change in assumption UK Irish Total
Schemes Schemes Half Year
2025
Discount rate Decrease by 0.5% 12.4 5.8 18.2
Increase by 0.5% (11.2) (5.3) (16.5)
Rate of inflation Decrease by 0.5% (9.2) (1.6) (10.8)
Increase by 0.5% 9.9 1.7 11.6
Rate of mortality Members assumed to live 1 year longer 4.5 5.2 9.7
Sensitivity of pension scheme assets to yield movements
Increase in Scheme Assets
Assumption Change in assumption UK Irish Total
Schemes Schemes
Change in bond yields Decrease by 0.5% 11.0 5.7 16.7
15. Contingencies
The Company and certain subsidiaries have given guarantees in respect of
borrowings and other obligations arising in the ordinary course of business of
the Company and other Group undertakings. The Company treats these guarantee
contracts as contingent liabilities until such time as it becomes probable
that a payment will be required under such guarantees. Expected credit loss
allowance in relation to these guarantees is not material.
Greencore have two letters of credit ('LoCs') in place to satisfy our
insurers' collateral requirements for Employers Liability and Motor
Self-Insured Programs for an amount of £4.2m (September 2024: £4.9m). The
insurers are responsible for paying out on these claims but recover amounts
quarterly from the Group. The LoCs will reduce the insurers credit exposure
during the period between the claim payout, if any, and subsequent recovery
from the Group.
16. Related party transactions
There have been no related party transactions or changes in the nature and
scale of the related party transactions described in the FY24 Annual Report
that could have a material impact on the financial position or performance of
the Group in the period ended 28 March 2025.
17. Subsequent Events
On 15 May, the Boards of Greencore Group plc and Bakkavor Group plc announced
that they have agreed the terms of a recommended acquisition of Bakkavor Group
plc.
18. Information
Copies of the Interim Financial Report are available for download from the
Group's website at www.greencore.com (http://www.greencore.com) .
APPENDIX: ALTERNATIVE PERFORMANCE MEASURES
The Group uses the following Alternative Performance Measures ('APMs') which
are non-IFRS measures to monitor the performance of its operations and of the
Group as a whole: Pro Forma Revenue Growth, Adjusted EBITDA, Adjusted
Operating Profit, Adjusted Operating Margin, Adjusted Profit before Tax
('PBT'), Adjusted Earnings, Adjusted Basic Earnings per Share, Maintenance and
Strategic Capital Expenditure, Free Cash Flow, Free Cash Flow Conversion, Net
Debt, Net Debt excluding lease liabilities and Return on Invested Capital
('ROIC').
The Group views these APMs as useful for providing historical information to
help investors evaluate the performance of the underlying business and are
measures commonly used by certain investors and security analysts for
evaluating the performance of the Group. In addition, the Group uses certain
APMs which reflect the underlying performance of the business on the basis
that this provides a focus on the core business performance of the Group.
CHANGES IN APMs IN THE FINANCIAL PERIOD
The Group had previously utilised an additional revenue APM, Like-for-Like
Revenue Growth, to complement the existing APM, Pro Forma Revenue Growth. The
Group had considered Like-for-Like Revenue Growth to provide a useful insight
to the underlying performance of the Group's revenue performance in FY24 due
to a proactive management of commercial returns, which resulted in the exit of
a number of sub-optimal contracts. The Group no longer utilises the
Like-for-Like Revenue Growth APM as the impact of those revenue adjustments
has now stabilised.
PRO FORMA REVENUE GROWTH
The Group uses Pro Forma Revenue Growth as a supplemental measure of its
revenue performance. The Group views Pro Forma Revenue Growth as providing a
guide to underlying revenue performance and is calculated by adjusting Group
revenue for the impact of acquisitions, disposals, foreign currency,
differences in trading period lengths and other non-recurring items in each
reporting period.
Pro Forma Revenue Growth half year FY25
For half year FY25 Pro Forma Revenue Growth is equal to reported revenue as
there were no adjusting events occurring in the current or prior financial
period.
Half year 2025
Group Revenue
%
Reported revenue 6.5%
Pro Forma Revenue Growth (%) 6.5%
The table below shows the Pro Forma Revenue Growth split by food to go
categories and other convenience categories:
Half year 2025
Food to go Other convenience
categories
categories
% %
Reported revenue 5.6% 8.1%
Pro Forma Revenue Growth (%) 5.6% 8.1%
Pro Forma Revenue Growth half year FY24
Pro Forma Revenue Growth adjusts Group revenue in H1 24 to reflect the
disposal of Trilby Trading Limited, which completed in September 2023.
Half year 2024
Group Revenue
%
Reported revenue (6.4%)
Impact of disposals 4.3%
Pro Forma Revenue Growth (%) (2.1%)
PRO FORMA REVENUE GROWTH (continued)
Pro Forma Revenue Growth half year FY24 (continued)
The table below shows the Pro Forma Revenue Growth split by food to go
categories and other convenience categories:
Half year 2024
Food to go Other convenience
categories
categories
% %
Reported revenue (0.3%) (16.9%)
Impact of disposals - 11.2%
Pro Forma Revenue Growth (%) (0.3%) (5.7%)
ADJUSTED EBITDA, ADJUSTED OPERATING PROFIT AND ADJUSTED OPERATING MARGIN
Adjusted EBITDA, Adjusted Operating Profit and Adjusted Operating Margin are
used by the Group to measure the underlying and ongoing operating performance
of the Group.
The Group calculates Adjusted Operating Profit as operating profit before
amortisation of acquisition-related intangibles and exceptional items.
Adjusted EBITDA is calculated as Adjusted Operating Profit plus depreciation
and amortisation of intangible assets. Adjusted Operating Margin is calculated
as Adjusted Operating Profit divided by Group revenue.
The following table sets forth a reconciliation from the Group's Profit for
the financial period to Adjusted Operating Profit, Adjusted EBITDA and
Adjusted Operating Margin.
Half Year Half year 2024
2025
£m £m
Profit for the financial period 19.8 11.5
Taxation((A)) 6.9 3.2
Net finance costs((B)) 11.4 10.6
Group Operating Profit 38.1 25.3
Exceptional items 5.6 1.5
Amortisation of acquisition-related intangibles 1.5 1.5
Adjusted Operating Profit 45.2 28.3
Depreciation and amortisation ((C)) 27.9 27.6
Adjusted EBITDA 73.1 55.9
Adjusted Operating Margin (%) 4.9% 3.3%
(A) Includes tax credit on exceptional items of £0.9m (H1 24:
£0.2m)
(B) Finance costs less finance income
(C) Excludes amortisation of acquisition-related intangibles
ADJUSTED PROFIT BEFORE TAX ('PBT')
Adjusted PBT is used as a measure by the Group to measure overall performance
before associated tax charge and other specific items.
The Group calculates Adjusted PBT as profit before taxation, excluding tax on
share of profit of associate and before exceptional items, pension finance
items, amortisation of acquisition-related intangibles, foreign exchange
('FX') on inter-company and external balances where hedge accounting is not
applied, and the movement on the fair value of derivative financial
instruments and related debt adjustments.
The following table sets out the calculation of Adjusted PBT:
Half year Half year
2025
2024
£m £m
Profit before taxation 26.7 14.7
Exceptional items 5.6 1.5
Pension finance items 0.4 0.6
Amortisation of acquisition-related intangibles 1.5 1.5
FX and fair value movements((A)) 0.6 (1.4)
Adjusted Profit Before Tax 34.8 16.9
(A) FX on inter-company and external balances where hedge accounting
is not applied, and the movement in the fair value of derivative financial
instruments and related debt adjustments
ADJUSTED BASIC EARNINGS PER SHARE ('EPS')
The Group uses Adjusted Earnings and Adjusted EPS as key measures of the
overall underlying performance of the Group and returns generated for each
share.
Adjusted Earnings is calculated as Profit attributable to equity holders (as
shown on the Group's Income Statement) adjusted to exclude exceptional items
(net of tax), the effect of foreign exchange (FX) on inter-company and
external balances where hedge accounting is not applied, the movement in the
fair value of all derivative financial instruments and related debt
adjustments, the amortisation of acquisition related intangible assets (net of
tax) and the interest expense relating to legacy defined benefit pension
liabilities (net of tax). Adjusted EPS is calculated by dividing Adjusted
Earnings by the weighted average number of Ordinary Shares in issue during the
period, excluding Ordinary Shares purchased by Greencore and held in trust in
respect of the Annual Bonus Plan, Performance Share Plan, Employee Share
Incentive Plan and Restricted Share Plan. Adjusted EPS described as an APM
here is Adjusted Basic EPS.
The following table sets forth a reconciliation of the Group's Profit
attributable to equity holders of the Company to its Adjusted Earnings for the
financial periods indicated.
Half year Half year
2025
2024
£m £m
Profit attributable to equity holders of the Company 19.8 11.5
Exceptional items (net of tax) 4.7 1.3
FX effect on inter-company and external balances where hedge accounting is not 0.1 0.1
applied
Movement in fair value of derivative financial instruments and related debt 0.5 (1.5)
adjustments
Amortisation of acquisition related intangible assets (net of tax) 1.1 1.1
Pension financing (net of tax) 0.3 0.5
Adjusted Earnings 26.5 13.0
Half year Half year
2025
2024
'000 '000
Weighted average number of ordinary shares in issue during the financial 436,002 468,649
period
Pence Pence
Adjusted Basic Earnings Per Share 6.1 2.8
CAPITAL EXPENDITURE
MAINTENANCE CAPITAL EXPENDITURE
The Group defines Maintenance Capital Expenditure as the expenditure required
to maintain/replace existing assets with a high proportion of expired useful
life. This expenditure does not attract new customers or create the capacity
for a bigger business. It enables the Group to keep operating at current
throughput rates but also keep pace with regulatory and environmental changes
as well as complying with new requirements from existing customers. This
includes expenditure on sustainability related initiatives which replace
existing assets.
STRATEGIC CAPITAL EXPENDITURE
The Group defines Strategic Capital Expenditure as the expenditure required to
facilitate growth and generate additional returns for the Group. This is
generally expansionary expenditure beyond what is necessary to maintain the
Group's current competitive position and enables the Group to service new
customers and/or contracts or to enter into new categories or manufacturing
competencies including automation related capital expenditure.
The following table sets forth the breakdown of the Group's cash outflow for
the purchase of property, plant and equipment and purchase of intangible
assets between Strategic Capital Expenditure and Maintenance Capital
Expenditure:
Half year 2025 Half year 2024
£m £m
Purchase of property, plant and equipment 17.9 12.0
Purchase of intangible assets 0.5 0.6
Net cash outflow from capital expenditure 18.4 12.6
Strategic Capital Expenditure 6.3 2.5
Maintenance Capital Expenditure 12.1 10.1
Net cash outflow from capital expenditure 18.4 12.6
FREE CASH FLOW
The Group uses Free Cash Flow to measure the amount of underlying cash
generation and the cash available for distribution and allocation.
The Group calculates the Free Cash Flow as the net cash inflow/outflow from
operating and investing activities before Strategic Capital Expenditure,
acquisition and disposal of undertakings and adjusting for lease payments and
dividends paid to non-controlling interests.
The following table sets forth a reconciliation from the Group's net cash
outflow from operating and investing activities to Free Cash Flow:
Half year 2025 Half year 2024
£m £m
Net cash inflow/(outflow) from operating activities 56.8 (8.0)
Net cash outflow from investing activities (18.4) (12.6)
Net cash inflow/(outflow) from operating and investing activities 38.4 (20.6)
Strategic Capital Expenditure 6.3 2.5
Repayment of lease liabilities (6.9) (8.4)
Free Cash Flow 37.8 (26.5)
FREE CASH FLOW CONVERSION
The Group uses Free Cash Flow Conversion to measure the Group's ability to
convert operating profits into free cash flow.
The Group calculates Free Cash Flow Conversion as Free Cash Flow divided by
Adjusted EBITDA. This is calculated on a 12- month basis. The following table
sets out the calculation of Free Cash Flow Conversion:
12 months to 12 months to
March 2025
March 2024
£m £m
Free Cash Flow ((A)) 134.4 54.6
Adjusted EBITDA ((B)) 170.9 148.8
Free Cash Flow Conversion (%) ((C)) 78.6% 36.7%
(A) Free Cash Flow inflow for H2 24 and H2 23 was £96.6m and
£81.1m respectively
(B) Adjusted EBITDA for H2 24 and H2 23 was £97.8m and £92.9m
respectively
(C) Free Cash Flow Conversion at 27 September 2024 was 45.6%
NET DEBT AND NET DEBT EXCLUDING LEASE LIABILITIES
Net Debt is used by the Group to measure overall cash generation of the Group
and to identify cash available to reduce borrowings. Net Debt comprises
current and non-current borrowings less net cash and cash equivalents and bank
overdrafts.
Net Debt excluding Lease Liabilities is a measure used by the Group to measure
Net Debt excluding the impact of IFRS 16 Leases. Net Debt excluding Lease
Liabilities is used for the purpose of calculating leverage under the Group's
financing agreements.
The following table sets out the calculation of Net Debt and Net Debt
excluding lease liabilities:
Half year Half year
2025
2024
£m £m
Cash and cash equivalents and bank overdrafts 21.9 21.0
Bank borrowings (127.5) (172.4)
Private Placement Notes (30.6) (46.6)
Net debt excluding lease liabilities (136.2) (198.0)
Lease Liabilities (51.7) (45.9)
Net Debt (187.9) (243.9)
RETURN ON INVESTED CAPITAL ('ROIC')
The Group uses ROIC as a key measure to determine returns for the Group and as
a key measure to determine potential new investments.
The Group uses invested capital as a basis for this calculation as it reflects
the tangible and intangible assets the Group has added through its capital
investment programme, the intangible assets the Group has added through
acquisition, as well as the working capital requirements of the business.
Invested capital is calculated as net assets (total assets less total
liabilities) excluding Net Debt, the carrying value of derivative financial
instruments not designated as fair value hedges, and retirement benefit
obligations (net of deferred tax assets). Average invested capital is
calculated by adding the invested capital from the opening and closing
Statement of Financial Position and dividing by two.
The Group calculates ROIC as Net Adjusted Operating Profit After Tax ('NOPAT')
divided by average invested capital. NOPAT is calculated as Adjusted Operating
Profit plus share of profit of associates before tax, less tax at the adjusted
effective rate in the Group Income Statement which is adjusted for the change
in fair value of derivative financial instruments and related debt instruments
and exceptional items.
The following table sets forth the calculation of net operating profit after
tax ('NOPAT') and invested capital used in the calculation of ROIC for the
financial periods ending 28 March 2025 and 29 March 2024.
12 months to 12 months to
March 2025
March 2024
£m £m
Adjusted Operating Profit 114.4 92.8
Taxation at the effective tax rate((A)) (26.0) (20.3)
Group NOPAT 88.4 72.5
Half year Half year
2025
2024
£m
£m
Invested Capital
Total assets 1,225.1 1,269.5
Total liabilities (772.8) (821.0)
Net Debt 187.9 243.9
Derivative financial instruments not designated as fair value hedges 0.7 (1.4)
Retirement benefit obligation (net of deferred tax asset) 7.2 15.2
Invested Capital for the Group ((B)) 648.1 706.2
Average Invested Capital for ROIC calculation for the Group 677.2 709.8
ROIC (%) for the Group ((C)) 13.1% 10.2%
(A) The adjusted effective tax rates for the financial period ended
28 March 2025 and 27 September 2024, were 24% and 22% respectively
(B) The invested capital for the Group in March 2023 was £713.3m
(C) ROIC at 27 September 2024 was 11.5%
APPENDIX: PRINCIPAL RISKS AND UNCERTAINTIES
The Group's Enterprise Risk Management (ERM) framework is continually
maturing. There is a comprehensive risk strategy, process, and governance
structure in place which enhances the Group's risk culture, delivers value-add
insights, and enables risk-informed decision-making.
The Group's Principal Risks and Uncertainties are formally reviewed by the
Executive Risk Oversight Committee and reported to the Audit and Risk
Committee. Mindful of increased uncertainty and volatility in the external
environment, the Group keeps its risk profile under constant review and
acknowledges the dynamic nature of the risks that could impede the delivery of
its strategic ambitions. The Group monitors the internal and external context
closely and is confident that robust and agile commercial and operational
arrangements are able to effectively mitigate such risks.
Principal risks and uncertainties faced by the Group are reported annually
within the Annual Report and Financial Statements and are summarised below.
Strategic
Strategic Change: The Group has a refreshed multi-year strategy and is
progressing plans to rebuild profitability and secure long-term growth.
Failing to suitably deliver an ambitious strategic change agenda may reduce
long-term Group performance.
Group Merger and Acquisition ('M&A') Activity: The Group is considering
M&A activities as part of its Horizon 3 growth agenda. There is a risk
that speculation on potential acquisitions could create a management
distraction and impede Group business-as-usual performance. There will also be
execution risks associated with business integration in the event of a
confirmed deal.
Sustainability: The Group's 'Better Future Plan' provides a roadmap for
mitigating the impact of our activities on the planet. Successful delivery of
these commitments requires ongoing investment in resources and the
prioritisation of these ambitions. Failing to deliver could impact the future
success of the Group and cause reputational damage.
Organisational Resilience: The external environment is increasingly volatile
and uncertain, and like all large, complex businesses, the Group is exposed to
a range of potentially disruptive influences, from geopolitics to climate
change and rapid advancements in technology. A failure to effectively build
resilience into Group strategy and operations may result in it being less
equipped to survive, innovate and thrive, in the face of future risk.
Business Architecture: The Group is committed to addressing a history of
disparate and inconsistent systems and processes across various functions and
a lack of standardisation and integration through its Making Business Easier
programme. Failure to deliver these improvements could impede Group
performance and restrict long-term growth.
People
High reliance on labour: The Group is reliant on high volumes of labour in its
production processes. An uncertain political, economic and social external
context, and the fast-paced and dynamic labour needs of the Group, could
increase the costs of this labour in unsustainable ways and impact labour
relations. This could have operational, commercial, and financial impacts
across the Group.
Health and Safety: The nature of the Group's operations exposes our colleagues
to inherent risks, with the workforce encountering potential hazards on a
daily basis. Ensuring the health and safety of our colleagues is of paramount
importance at Greencore, but without effective management, these risks could
result in accidents leading to harm to individuals as well as reputational and
potential financial damage.
Commercial
Competitor activity: The Group operates in highly competitive markets. Failure
to identify and respond to significant product innovations, technical advances
and/or the intensification of competition in our markets and those of our
customers, could adversely affect the Group's results.
Key Customer Relationships: Although the Group maintains a diverse customer
portfolio, any failure in price competitiveness, customer service levels, or
product quality, could result in deterioration in key relationships, the
possible loss of key customers and significant volumes, which could adversely
affect the Group's financial performance.
Commercial Growth: The Group has an ambition to significantly strengthen its
growth trajectory in the coming years. Growth within our core categories may
be subdued, whilst our leading position in convenience food may limit the
potential for significant growth through share gain. As such, the Group
recognises the need to evolve our portfolio over time to include higher growth
markets. A failure to innovate, diversify, or pursue suitable growth
opportunities may impede the Group's financial performance and ability to
achieve its growth ambitions.
Supply Chain Disruption: The Group has established a broad supply chain and
maintains strong supplier relationships. Nonetheless, external factors ranging
from crop failures, extreme weather, natural disasters, and geopolitical
conflict may disrupt supply of some raw materials, resulting in the potential
for significant shortages or increased costs, affecting the ability to satisfy
customer demand and affective the Group's financial performance.
Operational
Legacy IT Systems: The Group relies heavily on information technology to
support the business, which requires continuous investment and innovation.
Failure to successfully modernise and standardise legacy IT assets may lead to
increased costs and inefficient operations and impact overall Group
performance.
Cyber Security: The cyber threat landscape is complex and constantly evolving.
In common with all large organisations, the Group is exposed to the risk of a
cyber-attack that could threaten the availability and integrity of its
systems, and the confidentiality of data. Such attacks could cause significant
business disruption and cause financial and reputational damage to the Group.
Environmental Impact: The Group has significant manufacturing operations and
an obligation to minimise the impact of these activities on the environment.
Failure to sufficiently monitor and manage operational activities to minimise
the environmental impacts could lead to business disruption and cause
financial and reputational damage to the Group.
Operational Excellence: Operational Excellence underpins the Group's strategy
and future success. Failing to continue delivering this across all operational
and supporting activities could impede delivery of the Group's strategic
ambitions and impact future performance.
Product Contamination: The Group produces a significant volume of food
annually and there are risks of product contamination at a Greencore
manufacturing facility or one of our approved suppliers, through either
accidental or deliberate means. This may lead to potential harm to consumers
and result in significant financial, reputational, and / or legal impacts on
the Group. In addition, product recalls and withdrawals would require
significant resource investment.
Legal and Compliance
Regulatory Compliance: The Group's activities are subject to a complex and
constantly evolving regulatory landscape. Failure to comply with such
regulations and to enforce an effective internal control environment, may lead
to serious operational, financial, reputational and/or legal risk.
APPENDIX: RULE 28 OF THE TAKEOVER CODE
With the consent of Bakkavor Group plc, the UK Panel on Takeovers and Mergers
has confirmed that the Profit Forecast constitutes an ordinary course profit
forecast for the purposes of Note 2(b) to Rule 28.1 of the Takeover Code, to
which the requirements of Rule 28.1(c)(i) of the Takeover Code apply.
Directors' confirmation
The directors of Greencore confirm that the Profit Forecast has been properly
compiled on the basis of the assumptions set out below and that the basis of
accounting used is consistent with the Group's existing accounting policies.
Basis of preparation
The Profit Forecast is based on the Group's current internal unaudited
consolidated accounts for the six month period ended on 28 March 2025 and the
Group's current internal unaudited forecasts for the remainder of FY25. The
Profit Forecast has been compiled on the basis of the assumptions set out
below. The basis of the accounting policies used in the Profit Forecast is
consistent with the existing accounting policies of the Group, which uses
'Alternative Performance Measures' or other non-International Financial
Reporting Standards measures and then reconciles such measures to
International Financial Reporting Standards as approved by the International
Accounting Standards Board and adopted by the European Union.
Assumptions
The Profit Forecast has been prepared on the basis referred to above and
subject to the principal assumptions set out below. The Profit Forecast is
inherently uncertain and there can be no guarantee that any of the assumptions
listed below will occur and/or if they do, their effect on the Group's results
of operations, financial condition or financial performance may be material.
The Profit Forecast should be read in this context and construed accordingly.
The directors of Greencore have made the following assumptions in respect of
FY25:
(i) Assumptions within Greencore's control or influence
· no material change to the existing strategy or operation of the
Group's business;
· no material change to the expected realisation of launch and
commercialisation of new products or achievement of sustainability goals;
· no material deterioration in the Group's relationships with
customers, suppliers or partners, and no material adverse change to the
Group's ability to meet customer, supplier and partner needs and expectations
based on current practice;
· no material unplanned capital expenditure, asset disposals,
merger and acquisition or divestment activity conducted by or affecting the
Group (other than the recommended acquisition for Bakkavor Group plc by the
Group as announced today);
· no material change in dividend or capital policies of the Group;
and
· no material change to the present management of the Group.
(ii) Assumptions outside of Greencore's control or influence
· no material change to existing prevailing macroeconomic,
political, fiscal/inflationary, international trade or social conditions or
stability during FY25 in the markets or regions in which the Group operates;
· no material change in legislation, taxation or regulatory
requirements impacting the Group's operations, expenditure or its accounting
policies;
· no material adverse change to the Group's business model or
market environment before the end of FY25 (including in relation to customer
demand or competitive environment, including regarding the Group's market
share and product demand rates);
· no material adverse change to the Group's commercial
relationships or product service levels, and no material adverse events that
will have a significant impact on the Group's major customers or suppliers;
· no material disruption or delays to international transport
networks or adverse changes in supply chain costs to the Group;
· no material change in the Group's existing debt arrangements
(other than in connection with the recommended acquisition for Bakkavor Group
plc by the Group as announced today) or ability to access external finance and
refinance existing debt upon maturity;
· no material litigation or regulatory investigations, and no
material unexpected developments in any existing litigation or regulatory
investigation, each in relation to any of the Group's operations, products or
services;
· no material adverse events that would have a significant impact
on the Group including climate change, adverse weather events or information
technology/cyber infrastructure disruption; and
· there will be no material change in the control of the Group.
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