Greencore Plc reported a 15% increase in pro-forma adjusted operating profit to £73 million for the first half of the year, while holding to its full-year profit outlook. The company also disclosed a range of revenue and profit figures that reflect the inclusion of recent acquisitions in its results.
On a pro-forma basis, revenue rose 3.2% for the period, while standalone first-quarter revenue increased by 5.4%. Total reported revenue for the half-year was £1,318 million, a 43% rise compared with the prior year. The group's adjusted operating profit, reported elsewhere in the results, climbed 62% to £73.3 million - a figure the company says reflects the first-time consolidation of BAKK into Greencore's accounts.
Management said the integration of BAKK is advancing in line with plans and reiterated its commitment to capture synergies from the acquisition. The company maintained its target to deliver at least £80 million in synergies within three years of the deal.
The balance sheet shows a marked change year-on-year: net financial debt stood at £817.6 million at the half-year point, up from £136.2 million in the same period last year. Greencore did not adjust its full-year guidance in response to that increase, instead reiterating market expectations for adjusted operating profit of £222 million for the full year, on an excluding-US basis.
Looking at trading since the period end, the group said third-quarter trading to date has remained robust. Management noted that this performance comes against a strong prior-year summer comparator, making the near-term backdrop more challenging from a year-on-year comparison standpoint.
To address cost pressures, Greencore disclosed it has put near-term measures in place intended to manage potential inflationary effects related to the Middle East. The comment suggests active steps to mitigate input-cost inflation risks as they arise.
Context and implications
The headline figures show profit growth on a pro-forma basis and confirm the company is integrating acquisitions and pursuing identified cost synergies. At the same time, the company is carrying substantially more net financial debt following the acquisition activity and remains exposed to inflationary pressure linked to geopolitical influences in the Middle East.