LONDON (ShareCast) - (Sharecast News) - Convenience food producer Greencore reported a drop in first-quarter revenue on Tuesday as it said the latest national lockdown was "significantly" impacting demand.
In an update for the 13 weeks to 25 December 2020, the company said group revenue fell 15.1% to £312.7m, dented by the reduction in mobility arising from tiered restrictions and lockdowns in the UK over the period. Revenue in the food-to-go category fell 21.7% to £188.5m and other convenience categories saw a 2.1% dip to £124.1m.

Still, Greencore highlighted "positive" adjusted operating profit and adjusted earnings before interest, tax, depreciation and amortisation for the quarter and said it had secured additional new business.

The company - which makes sandwiches for Marks & Spencer, among other things - said the latest lockdown was significantly impacting demand in the food to go categories, although this was not as marked as the initial lockdown in March.

Pro forma group revenue is currently around 20% below prior year levels, with the food to go categories down about 35%, while other convenience categories remain stable.

Chief executive Patrick Coveney said: "Although the difficult trading conditions are likely to persist in the near term, we remain confident that demand for our food to go categories will recover strongly as the effects of Covid-19 recede and mobility restrictions are removed.

"We secured a number of new business wins in the quarter and have a healthy commercial pipeline as we look forward. In addition, the operational, debt and equity measures that we have taken in recent months provide us with a strong foundation from which to navigate our way through all of the challenges of Covid-19. We are confident that we have the capability and resources to build back the business rapidly as soon as market conditions allow, and we are optimistic about the medium-term prospects for Greencore."

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