Greencore: M&S sandwich supplier roars ahead amid takeover battle
Convenience food manufacturer Greencore told markets this morning that it expects profit to come in ahead of expectations for the second quarter, underpinned by “on-going operational and commercial excellence initiatives and a continued focus on cost control”, it said.
Convenience food company Greencore supplies all major supermarkets in the UK, including M&S, with chilled prepared meals and sandwiches as well as convenience and travel retail outlets, discounters and coffee shops.
It expects full-year adjusted operating profit to be ahead of current market expectations at £112m-£115m.
It is bidding for fellow fresh prepared food provider Bakkavor after its previous £1.1bn offer was rejected last March.
Bakkavor’s board has so far rejected Greencore, with concerns that the smaller company undervalues Bakkavor and its prospects.
Greencore’s annual turnover is £1.8bn, compared to Bakkavor’s £3.2bn, and the former operates 14 factories compared to the latter’s 20.
The Dublin-headquartered firm struggled with cost inflation and muted consumer confidence during the cost of living crisis, but a swing towards convenience last year and rising incomes has helped its fortunes.
Asda, Morrisons (with its McColl’s estate), Tesco, Waitrose, Sainsbury’s and the Co-op all ploughed ahead with small stores last year.
Waitrose, for example, has announced plans to double its number of small shops (from 45 to 145) and bump up its overall store portfolio by around a third.
As well as catering to a market looking for speed and convenience, smaller shops are in favour because they allow firms to rapidly expand into new areas and pick up more customers in a very competitive market.
In 2024, Greencore reported adjusted operating profit at £97.m, a 27.8 per cent rise, alongside a 15.7 per cent rise in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA).
Greencore will publish its half-year results on May 27.