Greencore is set to close a UK soup plant during the summer as part of its strategy to enhance efficiency across its manufacturing network. The Dublin-based private-label supplier will shut down the site in Kiveton, Sheffield, and consolidate soup production to its Bristol facility in south-west England. This move, scheduled for the fourth quarter of the current fiscal year, aims to optimize performance within Greencore’s operations.
Dalton Philips, Greencore’s CEO, clarified that while the soup plant at Kiveton will be closed, the two other plants on the site manufacturing ready meals and quiche will remain operational. Discussions with affected employees at the soup plant have concluded, with approximately 10% of the workforce facing displacement. Efforts will be made to reallocate them to other roles within the company.
According to Philips, the closure decision was driven by the need to improve operating efficiency by about 16%. This aligns with Greencore’s objective of ensuring each site covers its cost of capital. The company aims to achieve an adjusted operating profit of £86-88 million in 2024, marking a significant improvement in financial performance.
Additionally, Greencore secured a new supply contract with Aldi for its ready-meals factory in Kiveton, a development described as a “very material contract” by Philips. The company’s return to profitability in the first half of the year reflects progress towards its strategic goals under the Horizon strategy, which focuses on stabilizing the business and returning operating profit to previous levels.
In terms of financial performance, Greencore reported a 4.1% increase in group revenue on a like-for-like basis, with food-to-go revenue rising 4.6%. Convenience foods revenue, however, saw a 16.9% decrease due to the sale of the Trilby edible oils business and the exit from low-margin contracts. Despite challenges, Greencore’s volume performance in key categories remained strong.
Overall, Greencore’s financial results for the first half of the year demonstrated progress in achieving strategic objectives and outperforming market trends. Philips expressed optimism about the company’s accelerating financial performance and its focus on profitability and returns.
