LONDON (ShareCast) - (Sharecast News) - Convenience food producer Greencore warned on Thursday that full-year results will be at the lower end of current market expectations following a "soft" start to the year, with volumes hit by industrial action.
In an update for the 13 weeks to 30 December, the company said profit conversion was behind management expectations due to lower volumes and a lag in recovery of inflation over the calendar year end.

"To mitigate this shortfall, we are immediately implementing further measures through Better Greencore, accelerating, and broadening the scope of the programme," it said, the first phase of which is targeted to deliver annual recurring benefits of about £30m in FY24.

Greencore said first-quarter group reported revenue rose 19% year-on-year to £463m, driven by inflationary effects, with overall manufactured volumes modestly behind year-on-year.

Chief executive Dalton Philips said: "It's a difficult, volatile market, and the business has got off to a slower start to the year than envisaged. Given this, we are doubling down on our initiatives on inflation recovery, and in parallel, driving harder and faster to get our cost base to the right level."

The company, which makes pre-packed sandwiches, noted that while some raw materials and packaging inflation is easing, labour cost and energy inflation remains relatively high.

"The board is cognisant of the short term potential impact of the volatile recessionary environment and the cost-of-living factors on consumer spending throughout the remainder of the year," it said.

"Given the lower-than-expected volumes due to the disruptive impact of continued industrial action on demand and operations and the expected lag on inflation recovery the group now expects to generate an FY23 outturn at the lower end of current market expectations."

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