Greencore warns of 'uncertainty' in grocery market amid supermarket price war
Sandwich and ready meal maker Greencore said it expects the grocery market to remain "uncertain" as the supermarket price war rages across all parts of the UK's grocery industry.
The London-listed firm - which makes products under licence for Heinz, Bisto and Weight Watchers - said although the UK market remained difficult it is still confident of trading in line with market expectations.
It said: "The UK backdrop is expected to remain uncertain given the changing nature of the grocery industry and other potential economic headwinds."
The Dublin-based firm said its pre-tax profit fell by just over a fifth to £20.8 million in the half year to March 25 compared with a year ago, but added its exceptional charges jumped almost six times to £6 million during the period as it closed plants in the US and restructured its UK operations.
The firm's results come as the supermarket price war continues to bite across the grocery business, with major retailers battling to maintain market share against discounters such as Aldi and Lidl.
Earlier this month Sainsbury's posted a 13.8% fall in underlying annual profits to £587 million, adding it expected the grocery market to remain competitive for the "foreseeable future".
Greencore said its "food to go" ranges in the UK, such as sandwiches and sushi, account for 40% of group revenues, and added that the line continues to "exhibit strong growth". It said this range grew by 13.1% in the period compared with the year before.
Chief executive Patrick Coveney said: "Greencore has performed strongly in the first half of the year. Our strategy of focusing on the UK and US food to go markets is working well and we are continuing to invest in capacity and capability initiatives to support the substantial future growth pipeline.
"We are confident of further progress in the months and years ahead."
Jefferies analyst Martin Deboo said: "The first half is in line on the key metrics and is supportive of the broader growth story."