Greencore Serves Up Strong FY25 Results; Acquisition on the Horizon

Greencore Group PLC (LON: GNC), a leading UK convenience food manufacturer, has announced a robust FY25 performance, exceeding expectations and setting a positive tone for FY26.

The company's financial results showcase substantial growth across key metrics, alongside strategic advancements, including progress toward acquiring Bakkavor Group plc.

Headline Numbers:

Revenue: Group revenue increased by 7.7% to £1,947.0 million, driven by new business wins, volume growth, and pricing adjustments.

Profit & Margins: Adjusted operating profit soared by 28.9% to £125.7 million, improving the adjusted operating margin by 110 basis points to 6.5%. Group Profit before taxation increased by 29.3% to £79.5 million.

Cash & Balance Sheet: Free cash flow surged to £120.5 million, a significant improvement from the previous year, resulting in a stronger balance sheet with net debt (excluding lease liabilities) reduced to 0.4x adjusted EBITDA.

Greencore is rewarding shareholders with a proposed total dividend of 2.6 pence per share, a 30.0% increase from the previous year, reflecting confidence in the company's financial health and future prospects. The company's return on invested capital (ROIC) also saw a notable increase of 350 basis points to 15.0%.

Driver Breakdown:

• New Business & Volume: Net new business wins contributed 2.9% to revenue growth, with underlying volume growth and mix adding another 2.8%.
• Operational Excellence: Productivity gains from the company's operational excellence program drove a 4% improvement year-over-year.
• Strategic Investment: Increased capital investment of £43.4 million, a 34% increase from the prior year, reflects a commitment to core business growth and next-generation automation.

CEO Dalton Philips stated, “Greencore delivered an outstanding performance in FY25… Momentum has continued into the new financial year.” He further highlighted the potential of the Bakkavor acquisition, noting that it “brings two great businesses together and creates real value.”

Greencore also announced it has signed an agreement to sell its Bristol site to Compleat Food Group, which represents a significant step towards securing regulatory approval for the Bakkavor acquisition, which is expected to be completed in early 2026.

The Bristol site generated approximately £47 million in revenue in FY25, representing about 1% of the combined group's revenues.

Trading in early FY26 has started positively, and Greencore anticipates another year of profitable growth, despite an uncertain UK economic environment and continued inflationary pressures. The company's ability to mitigate these pressures, as demonstrated in previous periods, positions it favorably for continued success.