Greencore Group (LSE:GNC) has increased its adjusted operating profit guidance for the 2026 financial year following revenue growth, improved operating margins and initial cost savings from the integration of Bakkavor.
The UK convenience food manufacturer now expects adjusted operating profit of approximately £248 million from its continuing UK operations, supported by higher production volumes, operational efficiency measures and integration benefits.
Greencore reported fourth-quarter pro forma revenue of £1.04 billion, representing an increase of 4.5% compared with the corresponding period last year.
For the full financial year, pro forma revenue rose 3.6% to £3.38 billion, reflecting increased sales volumes across the enlarged group’s food manufacturing operations.
The company said its manufactured volumes increased 2.1% during the fourth quarter and 1.1% over the full year, with growth exceeding that of the wider UK grocery market.
Demand across chilled food categories contributed to the increase, including products such as prepared salads, sandwiches, ready meals and other convenience foods supplied to major UK retailers.
Greencore also reported the introduction of 167 new products during the period, reflecting ongoing product development activities across its manufacturing operations.
The company said efficiency programmes continued to contribute to operating margin improvements, alongside the initial financial benefits arising from its acquisition of Bakkavor.
Integration activities have focused on combining selected central functions, procurement operations and distribution arrangements across the enlarged business.
Greencore reported that these initiatives are generating early cost savings, with further integration work continuing across the group’s operations.
The acquisition has expanded Greencore’s product range and manufacturing capabilities, providing additional opportunities to supply existing customers with products previously offered by the separate businesses.
The company reported new cross-selling contracts covering salads, ready meals, dips, breads and desserts, representing approximately £30 million in annualised revenue.
These contracts form part of the group’s commercial integration activities, which are intended to increase sales across its expanded customer base.
Greencore also reported an improvement in cash generation during the period, contributing to a reduction in net debt to approximately £600 million.
The reported debt position represents around 1.8 times adjusted EBITDA, reflecting the group’s current leverage following the Bakkavor acquisition and subsequent cash generation.
Management continues to target a medium-term net debt-to-adjusted EBITDA ratio of between 1.0 and 1.5 times under its financing arrangements.
The company has identified debt reduction as a financial priority as it integrates Bakkavor and manages the capital requirements of the enlarged manufacturing business.
Greencore’s revised FY26 profit guidance reflects the combined contribution from revenue growth, production efficiency measures and initial integration savings.
The group expects adjusted operating profit of approximately £248 million for its continuing UK operations, although the supplied update did not specify the previous guidance figure.
Management also reported positive trading conditions during the early part of FY27, with demand continuing across the group’s convenience food categories.
The company is progressing the integration of Bakkavor while developing additional commercial opportunities through its broader manufacturing network and customer relationships.
Greencore’s US business is being treated as a discontinued operation as the group continues its planned exit from that market.
The company’s operations are therefore increasingly concentrated on UK food manufacturing, where it supplies a range of chilled and prepared products to major grocery retailers.
Greencore’s priorities for FY27 include further integration of Bakkavor, continued operational efficiency improvements, the development of cross-selling opportunities and the reduction of net debt.
About Greencore Group
Greencore Group plc is a UK-focused convenience food manufacturer supplying chilled and prepared food products to major grocery retailers.
The company produces a range of food categories, including sandwiches, salads, ready meals, dips, quiches, breads and desserts.
Following its acquisition of Bakkavor, Greencore operates an enlarged food manufacturing business with an expanded product portfolio and customer base.
Its activities include food production, product development, procurement and distribution, with operations primarily concentrated in the United Kingdom.
The group works with retail customers to develop and manufacture convenience food products, including new product ranges and existing private-label offerings.
Greencore is integrating Bakkavor’s operations into its existing business, with a focus on central functions, supply chain activities, procurement and commercial opportunities.
The company is also progressing its exit from the US market, with those operations classified as discontinued.
Its financial priorities include cash generation, debt reduction and maintaining leverage within its medium-term target range of 1.0 to 1.5 times net debt to adjusted EBITDA.
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