TIDMGNC
RNS Number : 0254B
Greencore Group PLC
05 October 2020
5 October 2020
Greencore Group plc
FY20 Q4 and Full Year Trading Update
Greencore Group plc ("Greencore" or the "Group") a leading
manufacturer of convenience foods in the UK, today issues a trading
update for Q4 and the full year ended 25 September 2020, ahead of
the publication of its full year results on 24 November 2020.
Highlights (1,2)
-- Resolute focus on three clear priorities - keeping our people
safe, feeding the UK, and protecting our business
-- Progressive improvement in revenue, Adjusted EBITDA and cash
generation in Q4, supported by continued increase in demand for
food to go categories
-- FY20 reported revenue of approximately GBP1,265m
-- FY20 Adjusted EBITDA of approximately GBP85m, after charging
in excess of GBP10m of non-recurring operating costs incurred by
the Group in responding to the impact of COVID-19
-- Net Debt (excluding lease liabilities) of approximately
GBP345m at year end, with strong liquidity in place to support the
business
-- Production fully restored at the Northampton site by mid-September 2020
Pro Forma Revenue Growth
Q3 2020 Q4 2020 FY20
Group -36% -19% -14%
Food to go categories -53% -28% -22%
Other convenience food
categories +2% +3% +3%
Commenting on the performance, Patrick Coveney, Chief Executive
Officer, said:
" The fourth quarter of our financial year has seen an ongoing
improvement in demand for our products. I am hugely proud of the
way that our people are supporting each other and our customers
during this extraordinarily challenging period, and it is their
hard work and dedication that is driving a resilient and improving
trading performance. Our agile business model, the depth of our
customer relationships and the strength of our product range has
enabled us to already capitalise on new business opportunities that
will help underpin the build back in Group revenue. We are
realistic but also confident in our plans for FY21, and remain
excited by Greencore ' s longer term prospects ."
Performance (1,2)
For the full year, the Group anticipates a reported revenue
outturn of approximately GBP 1,265m. Revenue trends continued to
recover through Q4, with pro forma Group revenue for the quarter
expected to be 19 % below prior year levels; an improvement on the
36% reduction in Q3.
Although UK consumer sentiment and broader economic activity
remain both fragile and subdued, the Group has seen a progressive
uplift in demand for food to go categories through Q4 as the
economy slowly reopened and as Greencore worked with its customers
to tailor product ranges, formats and service models to this new
environment. Underlying demand improve d through the quarter ,
notwithstanding the decision to temporar ily cease production at
the Northampton site during August 2020 following the COVID-19
outbreak in the area and at the site. Production was restored fully
at the site by the middle of September 2020.
Pro forma revenue growth in Q4 for the Group ' s other
convenience categories is expected to be approximately 3%.
As anticipated, Adjusted EBITDA improved in the final quarter
and the Group expects that for the full year, Adjusted EBITDA will
be approximately GBP 85m. This is after charging in excess of GBP
10m of non-recurring COVID-19 related operating costs. These
operating costs primarily comprise of front-line employee
recognition payments, incremental costs relating to furloughed
colleagues, costs incurred to reconfigure production areas and
implement measures to ensure safe working and social distancing and
are net of UK Government assistance under the Coronavirus Job
Retention Scheme.
The Group expects Net Debt (excluding lease liabilities) at year
end to be approximately GBP 345m , reflecting an improvement in
underlying cash generation in the final quarter as Adjusted EBITDA
increased and as working capital started to benefit from increased
volumes in the period. The Group retains strong liquidity, with
total committed debt facilities of GBP 578m and eligibility to
access funding under the Covid Corporate Financing Facility ( "
CCFF " ). The associated issuer limit for Greencore under the CCFF
is GBP 300m, although the Group has not drawn under this facility.
As previously announced, Greencore secured agreement with its bank
lending syndicate and its Private Placement Note Holders to waive
the Net Debt: EBITDA covenant condition for the September 2020 and
March 2021 test periods.
Following a decisive response to the impact of COVID-19 in Q3,
the Board of Greencore is encouraged by the progress seen in the
final quarter of FY20. While fully recognising the uncertainties
that lie ahead, the Group is well placed to continue to build back
the business in FY21.
[ENDS]
For further information, please contact:
Patrick Coveney Chief Executive Officer Tel: +353 (0) 1
486 3313
Emma Hynes Chief Financial Officer Tel: +353 (0) 1
486 3307
Jack Gorman Head of Capital Markets Tel: +353 (0) 1
486 3308
Rob Greening or Sam Powerscourt Tel: +44 (0) 20
Austrums 7250 1446
Billy Murphy or Louise Drury | Porter Novelli Tel: +353 (0) 1
Walsh 260 5000
(1) Unaudited
(2) Pro forma references throughout this statement are on a
constant currency basis. Reported revenue in the current year is
adjusted to reflect the ownership of Freshtime for the full period
in FY19 and excludes the impact of revenue from the exit of longer
life ready meals manufacturing at the Kiveton facility in H1
19.
About Greencore
Greencore is a leading manufacturer of convenience food in the
UK. It supplies grocery and other retailers including all of the
major UK supermarkets. The Group has 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 and pickles, and frozen Yorkshire
Puddings.
The Group's medium term financial ambitions are for mid
single-digit organic revenue growth, high single-digit Adjusted EPS
growth, the conversion of half of its Adjusted EBITDA to Free Cash
Flow and for mid-teen ROIC.
For further information go to www.greencore.com or follow
Greencore on social media.
Financial information relating to Greencore Group plc in this
announcement are not statutory financial statements within the
meaning of Section 340 of the Companies Act 2014 of Ireland and
have been published for the purposes of updating investors on
financial performance for the periods referenced in this
announcement. The statutory financial statements for the year ended
25 September 2020 have not been prepared or reported on by the
statutory auditors, and are expected to be delivered to the
Registrar of Companies of Ireland within 28 days of 16 February
2021.
Certain statements made in this announcement are 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. These forward-looking statements may generally, but
not always, be identified by the use of words such as ' will ' , '
aims ' , ' anticipates ' , ' continue ' , ' could ' , 'should',
'expects', 'is expected to', 'may', 'estimates', 'believes',
'intends', 'projects', 'targets', or the negative thereof, or
similar expressions.
By their nature, forward-looking statements 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. 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 other than as required by law.
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END
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