Greencore Group plc

For FY25, revenue was just under GBP 2 billion, up 7.7% year over year. Adjusted operating profit was GBP 125.7 million, up 28.9%, and adjusted operating margin improved 110 basis points to 6.5%. ROIC was 15%, up 350 basis points, free cash inflow was GBP 120.5 million, and leverage ended at 0.4x net debt to EBITDA. On revenue, 2.9% came from new business wins, 2.8% from underlying volume/mix, and 2.0% from inflation and pricing. For FY26, management said trading has started well, expects margin to improve, is guiding GBP 50 million of strategic capital investment, and said Bakkavor-related transaction costs in 2026 are estimated at about GBP 40 million.

Dalton Philips framed FY25 as an exceptional delivery year and emphasized that Greencore has built a “moat” around the business through innovation, technical leadership, complexity management, infrastructure and efficiency. He highlighted 534 new products launched, over 99% service levels, and a 4% increase in units per labor hour, arguing the business is highly resilient and still has plenty of room to grow. On the outlook, he said consumer confidence remains weak, but structural tailwinds such as convenience, premiumization and eating in versus eating out should support another year of profitable growth.

Catherine Gubbins focused on the financial outturn and said the company exceeded its pre-pandemic profitability target one year early. She cited adjusted operating profit of GBP 125.7 million, margin of 6.5%, free cash inflow of GBP 120.5 million, free cash flow conversion of 66.5%, and leverage of 0.4x net debt to EBITDA. She also broke out the margin bridge, including about GBP 45 million of inflation in the year, roughly 75% of which was labor-related, and noted 2026 inflation is expected at about 3% to 4%. On capital allocation, she said the dividend is being raised to 2.6p per share, up 30%, and that no further return of capital is planned while the Bakkavor transaction is completed and the group focuses on deleveraging.

Analysts focused on consumer demand, inflation, retailer negotiations, remaining self-help opportunities, cash conversion durability, and how much room is left to reach the 7% margin target. Management said the UK consumer backdrop remains fragile, but Greencore is benefiting from structural tailwinds and strong innovation-led conversations with retailers rather than cost-only negotiations. On margins, management said there is still plenty to do through customer innovation, next-gen automation, logistics, indirect procurement and overhead control, and that the 7%+ target remains appropriate on a stand-alone basis. On cash, management said the strong FY25 conversion was helped by proactive working capital management and that long-term conversion should remain above the medium-term target, though higher cash tax may offset the end of pension contributions.