Greencore Group (GNC) H2 2024 earnings summary

Executive summary

• Exceeded market expectations for FY 2024 profitability, with adjusted operating profit up 28% to £97.5 million and strong momentum into FY 2025.

• Like-for-like revenue grew 3.4% and volume grew 0.5%, outperforming the wider market.

• Successfully executed turnaround plans in underperforming categories, optimizing the portfolio and completing a £50 million capital return to shareholders.

• Reintroduced a progressive dividend policy after five years, declaring a 2.0p per share dividend and announcing a further £10 million share buyback.

• Executed commercial and operational excellence agendas, driving margin and ROIC gains.

Financial highlights

• Adjusted earnings per share increased 37% to 12.7p, with adjusted operating margin up 140 bps to 5.4%.

• Free cash inflow was £70.1 million, up 23% from 2023, with cash conversion at 45.6%.

• Net debt (excluding leases) at year-end was £148.1 million, leverage at 1.0x net debt/EBITDA.

• Gross margin improved 310 basis points since FY 2022, now above FY 2019 levels.

• ROIC increased to 11.5%, up 260 basis points year-over-year.

Outlook and guidance

• Confident in delivering FY 2025 adjusted operating profit within the top half of market expectations, despite labor cost headwinds.

• Anticipates low- to mid-single-digit revenue growth in FY 2025, driven by volume and premiumization.

• Operational excellence and cost control will be key to offsetting inflationary pressures.

• Medium-term growth strategy to be detailed at Capital Markets Day in February.

• FY25 guidance includes c.£60m depreciation/amortisation, c.£40m capex, and 23.0%-24.5% adjusted effective tax rate.