Shares in Greencore, one of the UK’s major convenience food manufacturers, have risen six per cent following Wednesday’s trading update which highlighted another strong quarter and a robust full-year performance.
The FTSE 250-listed group, which supplies sandwiches, rolls and wraps – and notably, the viral Japanese sando-inspired strawberry and cream sandwich – to Marks & Spencer, reported a full year revenue of around £1.95bn and upgraded its adjusted operating profit guidance to £125m, above previous forecasts.
The upbeat results come amid heightened pressure on M&S following a cyber attack that has disrupted online ordering and left some stores with empty shelves.
Greencore has responded by ramping up deliveries to its largest retail customer, putting extra shifts in its Northampton factory, and sending more lorries to stores than during Christmas, according to chief executive Dalton Philips.
Strong year for convenience foods
Greencore said its fourth quarter continued the momentum of the year, with manufactured volumes up approximately three per cent and underlying volumes (excluding new business wins) growing one per cent.
Product innovation also contributed significantly, with 130 new launches in the quarter, ranging from premium cooking sauces to elevated mac and cheese and hot and cold food-to-go items for new store formats.
“Our focus in the new financial year remains on producing high-quality, fresh food for consumers across the UK”, Philips said.
“We look forward to completing the Bakkavor transaction, subject to regulatory approval, and remain excited about the potential of combining two great UK food businesses”.
Profit conversion exceeded expectations thanks to strong volume growth and cost management initiatives, including waste reduction and efficient labour use.
Net debt is expected to fall to £70m, down from £148m the previous year, with net debt to EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) well below Greencore’s medium-term target range.
Responding to M&S cyber crisis
The M&S cyber attack, attributed to the hacker group Scattered Spider, caused weeks of disruption, with online orders for clothing and homewares offline and staff unable to clock in and out of systems.
In response, Greencore reverted to pen-and-paper ordering processes at its M&S-dedicated operations, while sending extra staff to key London stores to ensure supply.
“They’re a massive customer for us and we’re trying to flood them with products to help them”,Philips said at the time.
“There are times when you do need to revert to manual systems in any business… but look, it works well.”
M&S shares have struggled to recover fully from the attack, trading at 337p in early July, down from a high of 411p before the breach was revealed in April.
The retailer estimates the cyber fallout will cost £300m, although insurance and cost efficiencies are expected to offset some losses.
Greencore’s future outlook
Greencore also highlighted its ongoing acquisition of Bakkavor Group, which has passed shareholder approvals and is under review by the Competition and Markets Authority.
The merger promises to create one of the UK’s largest food-to-go suppliers, with potential synergies in product offerings and distribution.
For investors, the update signals that Greencore’s focus on operational excellence, product innovation, and customer service – especially in times of retail disruption – has strengthened confidence in the group.
The combination of strong underlying growth, cash generation, and resilience amid external shocks has driven the recent share surge and positioned the company as a cornerstone supplier in the UK convenience food market.