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Greencore Group PLC (GB:GNC)
LSE:GNC

Greencore (GNC) AI Stock Analysis

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GB

Greencore

(LSE:GNC)

Rating:75Outperform
Price Target:
206.00p
▼(-4.85%Downside)
Greencore's strong financial performance and strategic initiatives, such as the acquisition of Bakkavor, position it well for future growth despite some challenges. The company's effective cash flow management and operational improvements are key strengths. While technical indicators show moderate momentum and valuation is fair, the positive earnings outlook and corporate events provide a solid foundation for continued success.
Positive Factors
Financial Performance
Greencore has reported strong revenue and volume momentum supported by growth with customers and new business.
Mergers and Acquisitions
Substantial synergies would arise from the combination of Greencore and Bakkavor, potentially making this a firmly accretive deal.
Negative Factors
Cost Challenges
Strong trading performance was stymied by well-flagged headwinds from NLW/NIC.
Valuation Concerns
Greencore's proposals for Bakkavor were rejected by the Board, which concluded they significantly undervalued the group and its future prospects.

Greencore (GNC) vs. iShares MSCI United Kingdom ETF (EWC)

Greencore Business Overview & Revenue Model

Company DescriptionGreencore Group plc, together with its subsidiaries, engages in the manufacture and sale of convenience food products primarily in the United Kingdom and Ireland. The company provides various products, including sandwiches, salads, sushi, chilled snacking, chilled ready meals, chilled soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire Puddings. It is also involved in the trading of Irish ingredients; finance activities; and property business. The company supplies its products to supermarkets, convenience and travel retail outlets, discounters, coffee shops, foodservice, and other retailers. Greencore Group plc was incorporated in 1991 and is headquartered in Dublin, Ireland.
How the Company Makes MoneyGreencore generates revenue primarily through the manufacturing and sale of convenience food products to retail and foodservice customers. The company's key revenue streams include supplying own-label products to supermarkets and branded products to convenience stores, cafes, and foodservice outlets. Greencore's earnings are bolstered by long-term supply agreements and strategic partnerships with major retailers such as Tesco, Sainsbury's, and Marks & Spencer, which provide stable and recurring income. Additionally, the company leverages its extensive distribution network and economies of scale to optimize production costs and maximize profitability.

Greencore Earnings Call Summary

Earnings Call Date:May 15, 2025
(Q4-2024)
|
% Change Since: 14.55%|
Next Earnings Date:Dec 02, 2025
Earnings Call Sentiment Neutral
The earnings call presented a strong financial performance with significant profitability and cash flow improvements, and strategic shareholder returns. However, challenges such as a decline in reported revenue, sustainability progress, and upcoming labor cost pressures were noted. The company is positioned to mitigate these headwinds through operational excellence and innovation.
Q4-2024 Updates
Positive Updates
Profitability and Revenue Growth
Adjusted operating profit increased by 28% to £97.5 million, with adjusted earnings per share growing 37% to 12.7p. Like-for-like revenue growth was 3.4% and volume growth was 0.5%.
Strong Cash Flow and Balance Sheet
Free cash inflow of £70.1 million, an increase of 23% compared to 2023. Leverage reduced to 1x net debt to EBITDA, at the lower end of the target range.
Shareholder Returns
Completed £50 million capital return to shareholders, including a progressive dividend policy of 2p per share and a £40 million share buyback. Announced a further £10 million in buybacks.
Operational Improvements
Gross margin improved by 310 basis points since 2022. Adjusted operating margin increased by 120 basis points to 5.4%.
Innovation and Market Outperformance
421 new margin-accretive SKUs launched, with volume growth driven by key categories like sandwiches and ready meals outperforming the market.
Negative Updates
Revenue Decline
Reported revenue declined by 5.6% due to contract exits and the disposal of Trilby Trading.
Sustainability Challenges
Mixed performance in sustainability targets, with significant progress needed in carbon emissions and water usage to meet 2030 goals.
Labor Cost Headwinds
Facing new labor cost headwinds, including a £7.5 million impact from NIC increases and a 6.7% rise in the National Living Wage.
Capacity and Cost Management
Challenges in managing capacity and costs, especially in the ready meals sector with excess capacity and multiple new regulatory cost pressures.
Company Guidance
During the Greencore FY '24 Results Presentation, CEO Dalton Philips highlighted the company's strong financial performance, surpassing market expectations with a like-for-like revenue growth of 3.4% and volume growth of 0.5%. The company achieved an adjusted operating profit of £97.5 million, a 28% increase from the previous year, driven by operational and commercial excellence. Greencore completed a £50 million capital return to shareholders, including a £40 million buyback and a 2p per share dividend, with plans for a further £10 million buyback. The company reduced its leverage to 1x net debt to EBITDA, and improved its return on invested capital by 260 basis points to 11.5%. For FY '25, Greencore anticipates adjusted operating profit within the top half of market expectations, despite new labor cost challenges, and aims for low to mid single-digit revenue growth.

Greencore Financial Statement Overview

Summary
Greencore exhibits a well-rounded financial profile with efficient operations and solid cash flow management. While the balance sheet is stable, the income statement indicates a need for margin enhancements. Continued focus on reducing debt and improving profitability will be crucial for sustained growth.
Income Statement
75
Positive
Greencore's income statement shows a stable revenue base with a slight decline from the previous year, indicating potential market challenges. The company maintains healthy gross and EBIT margins, implying strong operational efficiency. However, net profit margins are modest, suggesting room for improvement in managing expenses.
Balance Sheet
70
Positive
The balance sheet reflects a sound equity position with a manageable debt-to-equity ratio. Return on equity has been positive, indicating decent profitability for shareholders. Nevertheless, the company's total debt level should be monitored to prevent financial strain.
Cash Flow
80
Positive
Greencore's cash flow statement is robust, with consistent free cash flow generation and positive operating cash flow to net income ratio. The company has demonstrated effective cash management practices, supporting operational and strategic initiatives.
Breakdown
Sep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
1.81B1.91B1.74B1.32B1.26B
Gross Profit
599.60M568.80M523.00M422.90M405.20M
EBIT
84.30M66.00M52.10M33.50M27.00M
EBITDA
147.80M124.10M110.60M101.30M80.30M
Net Income Common Stockholders
46.30M35.90M32.30M25.40M-9.90M
Balance SheetCash, Cash Equivalents and Short-Term Investments
57.30M116.50M99.60M119.10M267.00M
Total Assets
1.20B1.30B1.34B1.29B1.43B
Total Debt
250.30M315.50M327.60M361.80M678.20M
Net Debt
193.00M199.00M228.00M242.70M411.20M
Total Liabilities
754.50M837.90M873.10M868.30M1.14B
Stockholders Equity
450.20M459.80M465.60M423.20M276.50M
Cash FlowFree Cash Flow
79.60M61.60M42.90M62.50M-29.40M
Operating Cash Flow
112.00M99.00M92.90M102.70M2.50M
Investing Cash Flow
-31.70M-31.30M-50.00M-17.60M-31.60M
Financing Cash Flow
-98.70M-81.50M-69.40M-58.10M34.60M

Greencore Technical Analysis

Technical Analysis Sentiment
Positive
Last Price216.50
Price Trends
50DMA
185.48
Positive
100DMA
188.88
Positive
200DMA
191.18
Positive
Market Momentum
MACD
9.02
Negative
RSI
75.62
Negative
STOCH
92.57
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:GNC, the sentiment is Positive. The current price of 216.5 is above the 20-day moving average (MA) of 194.62, above the 50-day MA of 185.48, and above the 200-day MA of 191.18, indicating a bullish trend. The MACD of 9.02 indicates Negative momentum. The RSI at 75.62 is Negative, neither overbought nor oversold. The STOCH value of 92.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:GNC.

Greencore Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBPFD
79
Outperform
£1.83B14.889.02%0.81%5.90%11.24%
GBCWK
78
Outperform
£2.85B21.1114.14%1.72%8.74%-8.69%
GBHFG
78
Outperform
£798.85M20.3112.74%3.65%-0.03%7.88%
76
Outperform
£2.40B38.463.39%3.54%-11.03%-2.05%
GBGNC
75
Outperform
£935.63M21.5010.18%0.91%
70
Outperform
£1.20B21.739.10%3.83%4.03%3.21%
65
Neutral
$8.84B14.904.69%203.33%3.49%-1.84%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:GNC
Greencore
216.50
47.92
28.43%
GB:CWK
Cranswick
5,290.00
980.91
22.76%
GB:HFG
Hilton Food
890.00
18.25
2.09%
GB:PFD
Premier Foods
210.00
43.76
26.32%
GB:TATE
Tate & Lyle
554.00
-118.40
-17.61%
GB:BAKK
Bakkavor Group plc
204.00
72.96
55.68%

Greencore Corporate Events

M&A TransactionsBusiness Operations and Strategy
Greencore Acquires Bakkavor to Form UK Convenience Food Leader
Positive
May 15, 2025

Greencore Group PLC has announced a recommended acquisition of Bakkavor Group PLC to create a leading UK convenience food business with combined revenues of approximately £4 billion. The transaction offers significant value creation potential for shareholders of both companies, with Bakkavor shareholders receiving a premium on their shares and the opportunity to benefit from the future growth of the combined entity. The merger is expected to enhance product offerings, strengthen commercial relationships, and contribute positively to the UK economy.

The most recent analyst rating on (GB:GNC) stock is a Hold with a £160.00 price target. To see the full list of analyst forecasts on Greencore stock, see the GB:GNC Stock Forecast page.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Greencore Reports Strong H1 2025 Results and Upgrades Full-Year Guidance
Positive
May 15, 2025

Greencore Group PLC reported strong financial performance for the first half of 2025, with a 6.5% increase in revenue to £922 million and a significant rise in adjusted operating profit by 59.7% to £45.2 million. The company also announced an upgrade to its full-year profit guidance and a recommended acquisition of Bakkavor Group PLC. The results were driven by disciplined cost management, operational excellence, and new business wins, alongside a focus on product innovation. Greencore’s strategic initiatives, including automation and IT infrastructure improvements, have bolstered its market position, and the company expects continued growth despite a challenging market environment.

The most recent analyst rating on (GB:GNC) stock is a Buy with a £160.00 price target. To see the full list of analyst forecasts on Greencore stock, see the GB:GNC Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
Greencore Announces Change in Major Shareholdings
Neutral
May 7, 2025

Greencore Group plc has reported a change in its major holdings, with Societe Generale acquiring or disposing of voting rights that now total 5.628% of the company’s shares. This adjustment in holdings reflects a slight shift in the company’s shareholder structure, potentially impacting its governance and strategic decisions. The notification indicates that Societe Generale holds a significant stake, which may influence future company policies and stakeholder interests.

Regulatory Filings and Compliance
Greencore Announces Current Voting Rights and Capital Structure
Neutral
Apr 30, 2025

Greencore Group PLC announced that its issued ordinary share capital consists of 441,621,777 shares, each carrying one vote, resulting in a total of 441,621,777 voting rights. This information is crucial for shareholders to determine their notification obligations under the FCA’s Disclosure and Transparency Rules, impacting how they report changes in their shareholding interests.

Business Operations and Strategy
Greencore Appoints Deutsche Numis as Joint Corporate Broker
Positive
Apr 28, 2025

Greencore Group PLC has appointed Deutsche Numis as a joint corporate broker alongside Goodbody Stockbrokers and Shore Capital. This strategic move aims to strengthen Greencore’s financial advisory team and enhance its market presence, potentially impacting its operations and stakeholder relations positively.

Business Operations and StrategyRegulatory Filings and Compliance
Greencore’s Voting Rights Restructure Following Bank of America Transaction
Neutral
Apr 15, 2025

Greencore Group plc has announced a significant change in its voting rights structure due to an acquisition or disposal of financial instruments by Bank of America Corporation. The notification reveals that Bank of America’s voting rights in Greencore have decreased significantly from 8.089045% to 1.441075%. This shift in holdings could impact Greencore’s shareholder dynamics and influence future corporate decisions.

Business Operations and StrategyRegulatory Filings and Compliance
Bank of America Increases Stake in Greencore Group PLC
Neutral
Apr 14, 2025

Greencore Group PLC has announced that Bank of America Corporation has crossed a significant threshold in its voting rights within the company, now holding a total of 8.089045% of voting rights. This change, effective from April 10, 2025, reflects Bank of America’s strategic financial movements through both direct shares and financial instruments, potentially impacting Greencore’s shareholder dynamics and market positioning.

Business Operations and StrategyRegulatory Filings and Compliance
Greencore Group Announces Change in Voting Rights Structure
Neutral
Apr 4, 2025

Greencore Group plc has announced a significant change in its voting rights structure following an acquisition by JPMorgan Asset Management Holdings Inc., which now holds a total of 5.136534% of the voting rights. This acquisition marks a notable shift in the company’s shareholder dynamics, potentially impacting its strategic decisions and stakeholder relations.

Business Operations and StrategyRegulatory Filings and Compliance
BlackRock Increases Stake in Greencore Group PLC
Positive
Apr 3, 2025

Greencore Group PLC, a company in the food manufacturing industry, has announced a significant change in its shareholder structure. BlackRock, Inc. has increased its holdings in Greencore, surpassing the 5% threshold, now holding 5.29% of voting rights. This acquisition may influence Greencore’s strategic decisions and impact its market positioning, as BlackRock’s increased stake indicates a strong vote of confidence in the company’s future prospects.

M&A TransactionsBusiness Operations and Strategy
Greencore and Bakkavor Agree on Potential Merger to Form Leading UK Convenience Food Business
Positive
Apr 2, 2025

Greencore Group PLC and Bakkavor Group PLC have reached an agreement in principle on a possible cash and share offer by Greencore for Bakkavor, aiming to create a leading UK convenience food business with a combined revenue of approximately £4 billion. The proposed merger is expected to bring strategic and financial benefits, including enhanced innovation, supply chain capabilities, and economies of scale, which could lead to significant value creation for stakeholders and increased market capitalisation.

Business Operations and StrategyFinancial Disclosures
Greencore Exceeds Profit Expectations with Strong Q2 Performance
Positive
Apr 1, 2025

Greencore Group PLC reported strong revenue and volume growth in the second quarter of 2025, driven by customer expansion and new business acquisitions from the previous year. The company exceeded management’s profit expectations due to operational and commercial excellence initiatives and cost control measures. Greencore now anticipates its adjusted operating profit for the full year 2025 to surpass market expectations, ranging between £112-£115 million. This positive outlook underscores Greencore’s robust market positioning and operational efficiency, potentially benefiting stakeholders and enhancing its competitive edge in the convenience food industry.

Regulatory Filings and Compliance
Greencore’s Shareholder Voting Rights Update
Neutral
Mar 28, 2025

Greencore Group PLC has announced a change in the voting rights attached to its shares, following a transaction involving BlackRock, Inc. BlackRock’s holdings in Greencore have fallen below the 5% threshold, now standing at 4.98%. This adjustment in voting rights may influence Greencore’s shareholder dynamics and could have implications for the company’s governance and decision-making processes.

Other
Greencore’s Shareholding Update: BlackRock’s Stake Falls Below 5%
Neutral
Mar 25, 2025

Greencore Group PLC has announced a change in the voting rights attached to its shares, with BlackRock, Inc.’s holdings falling below the 5% threshold. This adjustment in shareholding indicates a shift in the investment landscape for Greencore, potentially impacting its market positioning and stakeholder interests.

M&A Transactions
Greencore’s Acquisition Proposals for Bakkavor Rejected
Negative
Mar 14, 2025

Greencore Group PLC has made two proposals to acquire Bakkavor Group plc, both of which were rejected by Bakkavor’s board. The revised proposal offered a combination of cash and shares, valuing Bakkavor at a 25% premium to its recent share price. Greencore believes the acquisition would create a leading UK convenience food business with significant revenue and potential for growth, benefiting shareholders with enhanced market capitalisation and liquidity.

Regulatory Filings and Compliance
Greencore Announces Current Voting Rights and Capital Structure
Neutral
Feb 28, 2025

Greencore Group PLC has announced that its issued ordinary share capital consists of 441,603,994 ordinary shares, each carrying one vote, resulting in a total of 441,603,994 voting rights. This information is crucial for shareholders as it serves as the denominator for calculating their interests or changes in interests under the FCA’s Disclosure and Transparency Rules.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.