LONDON (ShareCast) - (Sharecast News) - Convenience food company Greencore said on Tuesday that demand for its food-to-go categories was beginning to stabilise after a sharp decline due to the coronavirus outbreak, as it announced it was cancelling its final dividend.

Greencore said the Covid-19 pandemic had "a dramatic and volatile impact on the shape of UK food consumption" in the first six weeks of the second half of the year. However, there are signs demand patterns have recently begun to stabilise.

Weekly demand in the food-to-go categories slumped by up to 70% and is currently less than 60% below prior year levels. Still, the company noted "sustained growth" in its other convenience categories, in particular cooking sauces, with growth currently about 5% above prior year levels. Group revenue is now about 60% of prior year levels on a proforma basis, it said.

In the 26 weeks to 27 March, adjusted pre-tax profit fell 17.5% to £31.1m while revenue edged up 1.6% to £712.7m.

The company, which had already announced in March that it would not be proceeding with an interim FY20 dividend payment, said it will also not be paying a final FY20 dividend or an interim FY21 dividend.

"Whilst Covid-19 is clearly impacting Greencore's performance in the short-term, the group has taken a comprehensive set of actions to ensure that it is strongly positioned to build back the business as social restriction measures are eased. Greencore's medium-term strategic ambition remains focussed on optimising its growth potential in UK convenience food markets, supported by disciplined strategic investment.

"Given the ongoing level of uncertainty around the possible duration and impact of Covid-19, the group's financial guidance for FY20 was suspended on 30 March and the group's outlook for FY20 included in the FY19 full year results statement and FY20 Q1 trading update should no longer be considered current."

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