Greencore Group (LSE:GNC), the fresh convenience food manufacturer, said it expects to deliver FY26 Adjusted Operating Profit in line with current market expectations after pro forma adjusted operating profit increased 15.3%, to £73.3m, for the first half of FY26.
Pro forma revenue in the UK increased 3.2% to £1,318m in the period, driven by 0.8% from volume and mix and 2.4% from inflation recovery and pricing, with adjusted operating margin up 60 basis points.
"We expect to deliver FY26 Adjusted Operating Profit in line with current market expectations," said Dalton Philips, Chief Executive Officer.
Adjusted return on invested capital, adjusted for goodwill from the Bakkavor acquisition, was 10.8% and the group's leverage was 2.3x, below the c.2.5x range the board had expected post-completion.
Free cash flow was negative, which the company attributed to the timing of working capital outflows and exceptional acquisition and integration costs, and Greencore said integration of Bakkavor, completed on 16 January, is progressing to plan with a target of at least £80m of annual cost synergies within three years.
Operationally, legacy Greencore volumes were up 0.3% versus a flat grocery market while legacy Bakkavor UK volumes declined 1.3% in the short post-acquisition period; the combined group launched 308 new products and expects new business onboarding in Q3 and Q4 to drive about 100 basis points of annualised revenue growth.
The company said the US business is classified as held for sale and the next market update will be a Q3 trading statement on 22 July.
