Greencore, the UK's largest fresh convenience food manufacturer, has raised its full-year profit guidance for the second time after a stronger-than-expected fourth quarter, driven by volume growth and improving margins.
The Dublin-headquartered group now expects adjusted operating profit for its UK continuing operations to reach approximately £248 million for the year to 25 September.
That's ahead of market consensus of £238 million and the previously guided range of £234 million to £242 million.
Fourth quarter pro forma revenue rose 4.5% to £1.036 billion, bringing full-year pro forma revenue to £3.378 billion, up 3.6%.
Manufactured volume growth accelerated to 2.1% in the quarter, comfortably ahead of the wider grocery market at 0.5%, with chilled categories including salads, dips, quiche and sandwiches all performing strongly.
For the full year, Greencore's manufactured volumes grew 1.1%, again beating the broader market.
The group said synergies from its acquisition of rival fresh food maker Bakkavor were progressing well, with early gains in central reorganisation, procurement and distribution.
Net debt, excluding lease liabilities, is expected to be approximately £600 million at the year-end, equivalent to around 1.8 times adjusted earnings before interest, tax, depreciation and amortisation, against a medium-term target of 1 to 1.5 times.
Greencore also reported early momentum in cross-selling its expanded product range to existing customers, winning approximately £30 million of annualised revenue across salads, ready meals, dips and breads, due to launches in the second and third quarters of the new financial year.
Chief executive Dalton Philips said the business had never been in a stronger position and that customers were looking to do more with the group.
Full-year results are due on 1 December.
