Shares in Irish food-to-go company Greencore soared nearly 14 per cent on Tuesday morning after it upgraded its operating profit guidance, ahead of current market expectations, and launched a £30m share buyback programme.
Greencore, which sells products such as sandwiches, salads and sushi, now expects adjusted operating profit in a range of £86-88m for the full year 2024, especially as its “seasonally stronger second half” still lies ahead.
This is an upgrade on the range of £80.5m to £85m it said it was expecting for the full year during its first quarter results.
The company said adjusted operating profit soared over 600 per cent in the first half of the year to £28.3m, while adjusted EBITDA grew 40 per cent to £55.9m.
Greencore recorded revenue of £866m for the first half of 2024, down 6.4 per cent from the nearly £926m it posted in the same period a year ago. It said this was due to its decision to exit a number of low margin contracts last year.
It has also kicked off a £30m share buyback programme, as part of a plan to return £50m to shareholders over the following 12 months. The company expects the scheme to complete within the next half a year.
Dalton Philips, chief executive officer, said “Greencore delivered excellent progress against its strategic priorities in the first half and continued to outperform the market in a difficult consumer spending environment.
It is “accelerating financial performance is very encouraging as we focus on driving profitability and returns. We are working with our major retail customers to develop new products and new offerings which are driving the growth of our food to go segment ahead of the market.
“We have exited low margin business and are undertaking a range of actions to increase the returns profile of each element of the portfolio.
“We have many opportunities to continue to grow our business profitability and have commenced investing in our IT infrastructure to create a solid platform for growth and enable further efficiency gains across the Group,” Philips added.
Among measures to improve returns, it cut a UK factory in Somerset last year, with 400 jobs going.
Shares in the retailer have risen more than 46 per cent since the start of 2024 and 83 per cent over the past year.