Greencore said its underlying sales for the third quarter of its financial year rose by 9.3 per cent, as the company continued to pass on its own rising costs and customers increasingly bought its sandwiches as part of supermarket meal deals.
Sales rose to £495.4 million (€574.1 million) for the period, the Dublin-based food company said in a statement on Tuesday. The growth rate was adjusted to exclude an additional week of trading in the prior-year accounting period.
“The food to go category remains hugely relevant to consumers as they contend with the cost-of living crisis and it is particularly notable that 52 per cent of supermarket sandwiches are now bought as part of a meal deal, up from 46 per cent this time last year,” said chief executive officer, Dalton Philips.
Greencore said that sales growth of combo deals is being driven in part by customer demand for “premium meal deals” which include items like premium sandwiches, salads and sushi. Total food to go sales rose by 8.1 per cent to £335.3 million, driven by price increases by also 2 per cent sales volume growth.
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Sales in other convenience food categories, including chilled Thai curries and pasta dishes, soups, sauces and quiches, expanded by 4.7 per cent to £160.1 million in the reporting quarter.
The company said that the rate of inflation in some areas of its cost base “is now beginning to slow”.
Mr Philips, who took on his role 10 months ago, said the group is confident that it will post results for the full financial year to the end of September that are “in line with current market expectations”.
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The consensus view among analysts is that the company’s full-year sales will post adjusted operating profit of £70 million on sales of £1.97 billion. Operating profit for the previous year rose 85 per cent to £72.2 million as the company recovered from the effects of the Covid-19 pandemic on its business.
“As outlined at the interim results in May, our priority in the near-term is to rebuild profitability and returns to create a platform on which to build for future growth,” Mr Philips said.
Greencore, which drove the industrialisation of the production of the humble sandwich in the UK over the past two decades, has endured a difficult few years as it was hit by the pandemic – when its officer worker consumer base switched to working from home – Brexit, labour shortages and inflation.
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The upbeat trading statement, however, served to push the company’s share price up 5.1 per cent in London to 89 pence, a closing level last seen 10 months ago. The stock has rallied about 37 per cent so far this year.
“Overall, we are encouraged by the top-line momentum delivered during the quarter,” said Goodbody Stockbrokers analyst Jason Molins said. “Improved service levels aids operational efficiencies which, together with internal cost mitigation, should help underpin a significantly improved second-half profit out-turn.” Operating profit for the first half of the year amounted to £11.8 million.
