Greencore reported a remarkable 43% revenue growth for the half-year period ending 27 March 2026, primarily propelled by its acquisition of Bakkavor, which amounted to £1.5 billion.
While the company’s core UK operations demonstrate steady performance, the unaudited figures indicate solid growth, with pro forma revenues reaching £1.32 billion, reflecting a 3.2% increase, and pro forma adjusted operating profits amounting to £73.3 million, which is up by 15.3%.
Margins improved by 60 basis points to 5.6%, attributable to enhanced efficiency due to the implementation of over 870 operational excellence and automation initiatives during the initial half of the year.
This revenue boost was largely influenced by pricing strategies and recovery from inflation, contributing 2.4%, while volume and product mix offered a more modest increment of 0.8%. This trend points to a stable demand environment, although organic growth appears constrained, leading performance to hinge more on pricing and operational efficiency.
Bakkavor Integration
Despite Greencore’s base business achieving double-digit profit increases, integrating Bakkavor has resulted in a downturn in operating profits. This shifted from a £38.1 million profit in the first half of 2025 to a loss of £13.4 million.
The balance sheet underscores the immediate financial burden on the company, primarily stemming from acquisition costs. Free cash flow has dipped to negative £76 million, while net debt surged to £817.6 million, marking an increase of £681.4 million since the end of H1 2025.
Nonetheless, the integration of Bakkavor is progressing seamlessly. CEO Dalton Philips remarked that it is “progressing well and to plan” and indicated the business is on route to achieve its annual cost synergy target of £80 million within three years.
With a workforce of 28,000 and a diverse portfolio featuring over 4,000 products, operational performance remained robust during the integration process, with 308 new products launched and service levels maintained at around 99%. These launches included a festive ‘Yorkshire Pudding’ wrap, a range of summer dips and deli items, as well as health-oriented meals. The company also formed a new collaboration with sports nutrition brand Myprotein, unveiling a line of protein-enriched salads and wraps.
In terms of volume, the legacy Greencore business witnessed a growth rate of 0.3% for H1 2026, outpacing a stagnant grocery market during the same timeframe. Conversely, following the acquisition, the legacy Bakkavor UK business faced a 1.3% decline in volumes over a ten-week period.
This decline was partly due to the impact of minor business exits from the previous year, in contrast to a grocery market decrease of 0.2%. Notably, products such as sandwiches, sushi, and pizzas showed strong performance during this time.
Potential Sale of US Division
The report raises the possibility of divesting the group’s US division, despite its positive performance. This move appears to be part of a strategy to streamline the business’s portfolio and strengthen its foothold in the UK market.
Philips stated that the company is actively “monitoring macro developments and inflationary impacts from the events in the Middle East” but remains “confident in the short-term mitigations” it has implemented and the overall business outlook.
