Greencore raises 2026 operating profit outlook to £248 million
Key Facts
In a trading update issued on 13 October, Greencore raised its forecast for adjusted operating profit from continuing UK operations to about £248 million for the financial year 2026, ended 25 September. The estimate is above analyst consensus of £238 million and exceeds the previous guidance range of £234 million to £242 million. The company said underlying earnings momentum was ahead of expectations, driven by volume growth and continued margin improvement. The update shifts investors' focus from fourth-quarter performance to the group's ability to continue improving profitability after a year of integrating Bakkavor. Greencore cited ongoing excellence programmes and cost efficiency among the factors supporting performance.
Preliminary indicators showed manufacturing volumes accelerating to 2.1% in the fourth quarter, compared with growth of 0.5% in the broader grocery market. For the financial year, manufacturing volumes rose 1.1%, while the broader market grew 0.5%. Preliminary fourth-quarter revenue increased 4.5% to £1,036 million, while full-year revenue rose 3.6% to £3,378 million. Chief Executive Dalton Philips said the group "finished the fourth quarter strongly" and "delivered volume growth ahead of the market." The volume comparison indicates that Greencore's growth outpaced market expansion in both the quarter and the year.
The company said chilled categories, including salads, dips, quiche and sandwiches, performed strongly during the fourth quarter. It also launched 167 new products during the period, including Italian ready meals, sandwiches, salads and limited-edition mac and cheese products. In explaining revenue growth, Greencore pointed to the recovery of costs from inflation in labour, packaging and some raw materials; it attributed earnings momentum to volume growth and margin improvement. Together, these factors show growth combining the performance of chilled categories and product expansion with improved profitability. The company said delivery of synergies from the Bakkavor acquisition continued to progress strongly, with a fast start to synergies in central reorganisation, procurement and distribution.
Greencore completed its acquisition of Bakkavor on 19 January 2026. At completion, it said the combined group had 28,000 employees across 36 sites in the UK and the US. The new update comes as the companies continue to integrate, with management citing progress on integration alongside fourth-quarter volume growth. Adjusted operating profit in financial year 2025 was about £125.7 million, up 28.9% from £97.5 million in financial year 2024, with an adjusted operating margin of 6.5%. The raised 2026 estimate points to a further expected increase in profitability as the company continues to deliver acquisition-related synergies.
Greencore, meanwhile, expected net debt of about £600 million at the end of financial year 2026, excluding lease liabilities, equivalent to net debt of about 1.8 times adjusted earnings before interest, taxes, depreciation and amortisation. That compares with a medium-term target of 1 to 1.5 times. The company thus provided a leverage estimate alongside its upgraded profit outlook, while Bakkavor synergies remain part of the integration process. The information available in the update did not give a share-price move, while Investing.com reported a 3.7% rise to 272 pence on the morning of the 13 October announcement. This places the market reaction on the announcement date, rather than a later date, in the context of the new guidance.
Greencore said trading began positively in the first quarter of financial year 2027, with volume momentum from the fourth quarter continuing. At the same time, it pointed to macroeconomic uncertainty while reaffirming confidence in the resilience of demand for its core categories. It also said it had won annual contracted revenue growth of 75 basis points, equivalent to about £30 million in annual revenue, through cross-selling salads, ready meals, dips and bakery products. Launches tied to this revenue are due to begin in the second and third quarters of financial year 2027. The company is also continuing to make progress on the sale of its US businesses, which were treated as a discontinued operation and an asset held for sale; it said their trading performance was positive and in line with expectations. Greencore set 1 December 2026 as the date for publishing its financial-year results, which will provide details on final performance and integration progress.