UK's Greencore raises forecast as chilled food demand soars in summer

By Nithyashree R B and Pushkala Aripaka

(Reuters) -Chilled and frozen food manufacturer Greencore raised its annual profit forecast on Tuesday, driven by cost cuts and strong demand for its convenience products during the summer, sending the company's shares up more than 10%.

Greencore, which supplies chilled salads, sandwiches, sushi, soups and frozen Yorkshire puddings to stores in the UK, expects adjusted operating profit of 118 million pounds to 121 million pounds ($159 million to $163 million) for the year ending September.

That compares with its previous forecast of 114 million pounds to 117 million pounds.

"As we enter our seasonally-important Q4, our focus remains on maintaining momentum in our business," CEO Dalton Philips said.

The company, which counts Aldi, M&S, Tesco, Waitrose and Sainsbury's among its customers, reported a 9.9% sequential increase in revenue during the third quarter.

Shares rose as much as 11.6% to 269 pence by 0907 GMT, and were the top percentage gainer on London's mid-cap FTSE 250 index.

Greencore's update contrasts that of baker Greggs, which earlier this month warned of a profit dip as unusually high temperatures in the UK discouraged customers from eating out. Premier Foods also flagged the warmer weather was hitting demand for gravy, stock and soup.

Greencore launched 168 new products during the summer, it said, even as it cautioned of uncertainties in the broader macroeconomic environment. British food prices accelerated by the most since March 2024 in June, a survey earlier this month showed.

"The business is continuing to deliver upgrades despite cost headwinds, and we are taking an increasingly favourable view of the Bakkavor combination," Jefferies analysts said in a note.

Greencore said on Tuesday it continues to expect to close its $1.6 billion takeover of Bakkavor Group in early 2026, sending the fresh food provider's shares up as much as 8.1%.

($1 = 0.7423 pounds)

(Reporting by Nithyashree R B and Pushkala Aripaka in Bengaluru; Editing by Janane Venkatraman and Shilpi Majumdar)